Okonkwo, Fidelity Bank CEO

 BY EMEKA EJERE

Fidelity Bank Plc has once again demonstrated resilience, showing improvement in key income lines in its third quarter results for the year 2020 released recently at the Nigerian Stock Exchange (NSE).

According to details of the results, although Gross Earnings dropped marginally by 3.7 per cent to N155 billion from N161.1billion in 2019. Profits were up by 3.6%, closing at a Profit Before Tax (PBT) of N21.3bn while Profits After Tax (PAT) rose by 7% from N19bn to N20.4bn in the period under review.

In other indices, Customer Deposits, Net Loans and Total Assets grew in double digits. Total Assets grew by 21% from N2.1bn in 2019 to N2.5bn; Customer Deposits were up by 22.3%from N1.23bn to N1.5bn while Net Loans rose by 12 percent to N1.27billion from N1.12billion.

Commenting on the results, Group Chief Executive Officer of the bank, Mr. Nnamdi Okonkwo said: “Our 9 months results reflect our resilient business model, particularly in a very challenging operating environment. We worked closely with our customers to gradually recover from the economic impact of the pandemic and the attendant effect of the lockdown.”

Okonkwo explained that the drop in gross earnings was due to the decline in interest and similar income caused by lower yields and drop in fee income.

He said, “Net fee income declined by N1.3 billion largely due to a reduction in FX related income on account of the revaluation gains recorded in H1 2020. Digital Banking however continued to gain traction as we now have 52.3 per cent of our customers enrolled on the mobile/internet banking products from 47.4 per cent in 2019 full year and 88.2 per cent of customer-induced transactions are done on digital platforms.

“Similarly, digital banking income increased by 20.0 per cent quarter on quarter due to improved adoption by customers and new services migrated to our digital channels.”

The lender has over the years implemented a retail digital banking strategy which has continued to pay off, with the bank now on course to achieving the 7th consecutive year of double digits growth.

“The growth in savings deposits accounted for 40.2 per cent of total growth in customer deposits and savings deposits now represent 25.7 per cent of total deposits, up from 22.3 per cent in 2019,” Okonkwo enthused.

He further disclosed that the bank has disbursed over N50 billion in intervention funds to customers in the last three months, in critical sectors to kick-start the economy after the lockdown and was quite optimistic about finishing the year strongly.

“We will continue to monitor and pro-actively manage evolving risks as business activities improve and look forward to delivering another set of resilient results in the remaining quarter of 2020 FY,” he said.

The bank’s defiance of the lingering economic headwinds occasioned by the COVID-19 pandemic had first reflected in its 2020 half year result which showed basic improvement in all the major income lines. From its audited H1 2020 results, the lender recorded a gross earnings increase moving to a new figure of N106 billion, compared with the N104 billion it had recorded in the same period in 2019.

There was also a PBT upswing as it polled N12 billion in H1 2020, which translates to a 22 per cent growth. When compared with the N9.8 billion recorded in 2019, at the end, net profit grew by 33 per cent from N8.5 billion to N11.3 billion in the comparable period year on year.

Total Assets rose by 13.7 percent, from N2.1 trillion in H1 2019, to N2.4 trillion in H1 2020, even as total deposits rose by 14.8 percent, from N1.2 trillion to N1.4 trillion across the 12-month span. Also, despite the tight macro-economic environment, Fidelity Bank had beaten expectations with a quite impressive 2019 full year result, showing strong growth across key income and balance-sheet lines. The bank declared Gross Earnings growth of 14.0 percent to N215.5bn from N189.0bn reported in 2018. Its PBT rose by 21.0 percent to N30.4bn compared with N25.1bn recorded in the previous year.

In the same vein, Net Profit surged by 24 percent, from N22.9bn in 2018, to N28.4bn in 2019. In other indices, Net Interest Income increased by 13.2 percent to N83.1bn. Net Operating Income rose by 15.6 percent from N97.2bn to N112.3bn while Total Assets grew by 22.9 percent from N1, 719.9bn to N2, 114.0bn in the period under review.

“We are delighted at the results which clearly showed that we sustained our performance trajectory and continued to increase our market share driven by significant traction in our chosen business segments”, Okonkwo had noted at the time.