FELIX OLOYEDE
Double digit growth in earning assets, deposits and fee income spurred Fidelity Bank to improve its profit in the first six months of 2018.
The Bank grew its gross earnings marginally by 3.6 per cent to N88.92 billion, driven by 33.8 per cent increase in fee and commission income and 2.5 per cent growth in interest earnings. Its Operating Income was up 32 per cent to N27.46 billion.
Consequently, pre-tax profit rose 27.3 per cent to N8.03 billion, while Profit After Tax (PAT) climbed by 31 per cent to close at N11.8 billion from N9.03 billion recorded in 2017.
The lender’s operating expenses increased by 5.7 per cent year-on-year to N 17.54 on the back of increased technology and regulatory charges (NDIC/AMCON). However, cost to income ratio remained relatively stable at 67.7 per cent (2017FY: 67.5 per cent).
Fidelity Bank made significant progress in cutting its impairment charges by -46.1 per cent to N2.59 billion.
Total deposits grew by 19.7 per cent to N927.9 billion in June 2018 from N775.3 billion in December 2017 on account of double digit growth across all deposit products whilst funding costs declined. And savings deposits grew by 10.6 per cent YTD from December 2017, which contributed to the drop in average funding cost in H1 2018.
Its risk assets increased by 3.5 per cent year-to-date to N795.4 billion from N768.7 billion in December 2017 with cost of risk at about 0.7 per cent and coverage ratio at 112.7 per cent.
Though its non-performing loan (NPL) ratio is still above the five per cent regulatory benchmark, Fidelity Bank cut it down to by 6.1 per cent in H1 2018 from 6.4 per cent in 2017.
Coverage Ratio improved to 112.7 per cent in H1 2018 from 109.4 per cent in 2017FY.
The bank’s Capital Adequacy Ratio stood at 17.0%, based on Basel II computation, better the 15 per cent required and Liquidity Ratio was 33.2 per cent compared to regulatory minimum of 30.0 per cent.
Commenting on the results, Fidelity Bank CEO, Mr. Nnamdi Okonkwo attributed the impressive performance to the disciplined approach in managing the balance sheet growth of the bank, its strategic cost containment initiatives; focused attention to chosen business segments and determined execution of its retail and digital banking strategy.
He stated further, “Gross earnings, net fee and commission income all grew primarily due to the increase in transactional activities. Our digital banking initiative continues to gain traction with almost 40 percent of our customers now enrolled on our mobile/internet banking products and over 80 percent of total transactions now done on our digital platforms.”
