Business
With impressive Q1 results, Fidelity bank rekindles Tier 1 ambitions
By OBINNA EZUGWU
The outcome of Fidelity Bank’s QI results that was made public on Thursday confirms that the Bank is steadily inching towards attaining its long-desired goal of playing in the Tier 1 league of the nation’s banking sector.
According to the report, the bank recorded a 34.0 per cent growth in its profit showing, which rose to N6.7 billion in 2019, up from the N5.0 billion that it had recorded in the corresponding period in Q1 2018.
Most importantly, the bank’s financial statement showed that its gross earnings was up 11.8 per cent to N48.4 billion in the first three months of the year, which represents an improvement on the N43.3 billion it had garnered in the corresponding period in 2018.
Before now, it will be recalled that Fidelity Bank had notably grown its gross earnings to 188.9billion in FY 2018.
In the current Q1 2019 report under consideration, it also posted fairly impressive outcomes in its deposits, loans and other performance indices during the period.
Speaking on the Q1 2019 financial results, Mr. Nnamdi Okonkwo, the bank’s Chief Executive Officer, said the double digit growth in earnings and profits further demonstrates a positive start for the new financial year.
“We remain focused on the execution of our medium-term strategic objectives and targets for the 2019 full year, while we look forward to sustaining the momentum and delivering another strong set of audited results for 2019,” Okonkwo stated.
Elaborating, he pointed out that the bank’s gross earnings rise had come on the back of growth in fund and fee-based income.
“We recorded double digit growth across key income lines: Foreign exchange income (34.4 per cent), digital banking income (34.6 per cent), account maintenance charge (25.5 per cent) and interest income on liquid assets (10.1 per cent)”, Okonkwo disclosed.
According to the Fidelity Bank CEO, digitalisation and the bank’s retail strategy continues to positively impact on its fortunes with 43 per cent of customers now enrolled on the mobile/internet banking products.
He noted that more than 81 per cent of total transactions were done on digital platforms, resulting in 25 per cent of its fee-based income, now coming from digital banking.
“Savings deposits which now account for 24 per cent of total deposits in the period increased by 6.2 per cent to N242.1 billion indicating that the bank is on a steady march to achieving the sixth consecutive year of double-digit savings growth,” Okonkwo added
Analysts however say that notwithstanding the impressive strides recorded by the bank, it still needs to do a lot of work to enable it achieve its ling-nourished dream of inching into the prestigious Tier 1 club.
This is because it is running alongside financial services sector playmates like Zenith Bank which on its part had posted gross earnings of N630.34billion and the United Bank of Africa that recorded gross earnings of N494billion in its Full Year 2018 report.
Other banks with notable gross earnings outcomes are: Ecobank, N773billion; Access Bank, N528.75billion; GTBank, N434billion; Stanbic IBTC, N222billion; FCMB, N177.4billion; Union Bank, N145billion; Sterling Bank, N152.2billion and Wema Bank, N71.53billion.
But Okonkwo is seemingly not perturbed, preferring to take the issue in his stride. As he disclosed recently also, the core of the matter for him and his team at Fidelity Bank has to do with goal-setting, goal-driving and goal-achieving:
“We have also realised that we have to go down market … to build up our low cost deposit and reduce cost, which is what we are using technology to do. We have a detailed strategy. We have grown savings accounts for five years now in double digits. From N75billion in 2013, just before I became CEO, today it is N226 billion.
“Current account, savings account and domiciliary accounts which are all low cost deposits currently account for 81.5 percent of our total deposit base. Therefore, having built up low cost deposit at the lower end of the market, you are able to support the manufacturers, encouraging more employment; reducing poverty and helping people earn money. By this, disposable income will increase.
“If you look at our capital adequacy ratio, you look at our risk management, our performance our liquidity ratio and all of that, you will see that we are steadily achieving the regulatory requirements and even exceeding them. Those are signs that that we are getting there,” the Fidelity Bank CEO emphasised.
