Fidelity Bank Raised Profit 33% in First Half 2020

Fidelity Bank Raised Profit 33% in First Half 2020

Fidelity Bank Plc has bolstered first half earnings performance despite multitude of operational and economic challenges lender faced in the first half of 2020.

In the first half of 2020, the bank’s gross earnings increased to ₦105.755 billion from ₦103.655 billion in the comparable period in 2019.

The bank stock has gained 6 kobo since the release of the first half result, jumped from N1.80 to N1.86 per share.

Speaking to the results, the bank said it had sustained the financial performance trajectory of recent years with another set of impressive financial results.

At the bottom line, lender’s profit before tax printed ₦12.0 billion from ₦9.8 billion in 2019, which represents a 22% year on year growth.Fidelity Bank Raised Profit 33% in First Half 2020

Due to lower tax expenses, profit after tax expanded faster by 33% from ₦8.5 billion to ₦11.3 billion in the reporting period.

Meanwhile, total assets increased by 13.7% from ₦2.1 trillion in 2019 to ₦2.4 trillion year to date whilst total deposits rose by 14.8% from ₦1.2 trillion to ₦1.4 trillion during the same period.

In his comment, the Chief Executive Officer of Fidelity Bank, Nnamdi Okonkwo said the performance for the period reflected 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 added.

The Bank Chief explained that lender re-stated its H1 2019 figures from ₦15.1billion to ₦9.8 billion 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 recognised 100% in our H1 2020 accounts rather than been amortised over 12 months as was done previously on our financials,” bank CEO said.

He said that without implementing IFRIC 21, profit for the period would have been ₦17.9 billion compared to the ₦15.1 billion 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 %of the bank’s customers now transacting on digital platforms.

“The figures are up from 82.0% in 2019, while 51.2% of the bank’s customers are now enrolled on the bank’s mobile/internet banking products.

“Though digital banking income dropped by 29.1% 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.

“Retail banking in Fidelity Bank has continued to also deliver impressive results.

“Savings Deposits in H1 2020 increased by 32.2% to ₦363.9 billion with the bank on course to achieving the 7th consecutive year of double-digit growth in savings.

“Savings Deposits accounted for 49.1% of the total growth in customer deposits and now represents 25.9% of total deposits compared to 22.5% in 2019.

“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 % from 3.3% in 2019.

Read Also: Big Banks’ Profits Rise 4% in H1:2020 Earnings Season

“Regulatory Ratios however remained above the required thresholds with Capital Adequacy Ratio increasing to 18.8% from 18.3% due to the capitalisation of H1 2020 Audited Profits while Liquidity Ratio stood at 32.1%.

“Buoyed by the H1 performance, the bank is 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.

Fidelity Bank Raised Profit 33% in First Half 2020

 

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