By Fola James
Fidelity Bank has sustained the financial performance trajectory of recent years, with another set of impressive financial results, despite the economic challenges occasioned by the COVID-19 pandemic .
Details of the Audited Half Year results ending June 30, 2020 for the top Nigerian lender, released on the Nigerian Stock Exchange, NSE on Thursday September 3, 2020, show strong growth in profits and other indices.
The bank recorded a surge in Profit Before Tax of N12.0bn from N9.8bn in 2019, which translated to a 22 per cent growth. Net profits for Fidelity Bank grew by 33 per cent from N8.5bn to N11.3bn in the reporting period. In other indices Total Assets rose by 13.7 per cent from N2.1trillion in 2019 to N2.4trillion this year whilst Total Deposits rose by 14.8 per cent from N1.2trillion to N1.4trillion during the same period.
Commenting on the results, Fidelity Bank CEO, Nnamdi Okonkwo said the performance for the period, reflects the resilience of the bank’s business model. “Due to the global and domestic headwinds witnessed in H1 2020, we proactively increased our cost of risk as the impact of the pandemic slowed down economic activities whilst adapting our business model to the new risks and opportunities of the new normal” he stated.
According to him, Fidelity Bank, re-stated its H1 2019 figures from N15.1bn to N9.8bn to reflect the impact of IFRIC 21- Levies, which was adopted for the first time on the H1 2020 financials.
“The key impact of IFRIC 21 was that our 2020FY AMCON Cost was recognized 100 per cent in our H1 2020 Accounts rather than been amortized over 12 months as was done previously on our financials” said the Fidelity CEO”.
He further revealed that, without implementing IFRIC 21, profit for the period would have been N17.9bn compared to the N15.1bn reported in H1 2019.
Fidelity Bank has been implementing a digital-led retail strategy and digital banking gained further traction during the period with 87.3 per cent of the bank’s customers now transacting on digital platforms. The figures are up from 82.0 per cent in 2019FY while 51.2 per cent of the bank’s customers are now enrolled on the bank’s mobile/internet banking products.
“Though digital banking income dropped by 29.1 per cent due to the downward fee revisions for electronic transactions in line with the new bankers’ tariff, we have continued to receive positive reviews on our digital channels. IVY, the bank’s chat box is rated as the clear leader, among virtual assistants in the industry, just as our flagship instant banking product (*770#) was also rated in the top tier category in the recently released 2020 KPMG Digital Channels Scorecard” Okonkwo explained.
Retail Banking in Fidelity Bank has continued to also deliver impressive results. Savings Deposits in H1 2020 increased by 32.2 per cent to N363.9bn with the bank on course to achieving the 7th consecutive year of double-digit growth in savings. Savings Deposits accounted for 49.1 per cent of the total growth in customer deposits and now represents 25.9 per cent of total deposits compared to 22.5 per cent in 2019FY.
In reflection of the bank’s early conservative assessment of the sectors that were affected by the COVID-19 pandemic, the bank’s Non-Performing Loans (NPL) ratio increased to 4.8 per cent from 3.3 per cent in 2019FY. Regulatory Ratios however remained above the required thresholds with Capital Adequacy Ratio increasing to 18.8 per cent from 18.3 per cent due to the capitalization of H1 2020 Audited Profits while Liquidity Ratio stood at 32.1 per cent.
Meanwhile, the bank said it’s optimistic about the remaining part of the year . “We believe the new phase of normalcy will unveil some growth opportunities. We will continue to monitor and pro-actively manage any evolving risks as the Nigerian economy gradually reopens and economic activities pick-up in key sectors” Okonkwo stated.
