Fidelity Bank Reiterates Plan to Pursue Tier-1 Capital Identity
Fidelity Bank Plc has again reiterates commitment to pursue Tier-1 capital identity by 2025 following a strong start to the year as lender’s profit surged 53% in Q1-2021.
At its 33rd Annual General Meeting, the Managing Director of Fidelity Bank Plc, Mrs. Nneka Onyeali-Ikpe, said that the top priority during her tenure would be to ensure the bank’s emergence as a Tier 1 financial institution by 2025.
The Chief Executive revealed that Fidelity Bank is also targeting to achieve 7.5 per cent of the market share in total deposit by 2025.
Onyeali-Ikpe noted that the bank would achieve the targets through digitisation of processes and innovation, adding that the bank will digitalise its processes; ensure a strong staff welfare.
“Employees are a very critical resource for an organisation to move forward and we would continue to be innovative to be competitive in the industry,” she said.
Onyeali-Ikpe added that the bank would refresh its brand to ensure top brand awareness among customers and the general public.
Meanwhile, the shareholders at the meeting unanimously endorsed the payment of a cash dividend of 22k per share after considering taxes and other financial obligations.
The dividends translated to N6.4 billion as pay-out for the year ended Dec. 31, 2020.
The shareholders who spoke at the event praised the bank and management for the 38.7 per cent increase in total customer deposits, which rose from N1.23 trillion in 2019 to N1.69 trillion in 2020.
Speaking at the meeting, Dr. Farouk Umar, President, Association for the Advancement of the Rights of Nigeria Shareholders, commended the bank for posting an encouraging performance in 2020 despite the challenges of the COVID-19 pandemic.
Umar appreciated the bank for paying dividends the same day of the Annual General Meeting unlike their peers in the industry that pay a day after the AGM.
Also speaking, Mrs. Bisi Bakare, National Coordinator, Pragmatic Shareholders Association of Nigeria, commended the bank for declaring dividends in spite of the unfriendly economic environment and the COVID-19 pandemic challenges.
Bakare welcomed Onyeali-Ikpe and Mr. Chike-Obi, urging them to sustain the growth and ensure higher dividend in the years ahead.
Earlier, Mustapha Chike-Obi, Chairman of the Board of Directors of Fidelity Bank, assured shareholders that the board and management of the bank would do everything possible to ensure the bank’s continued growth in the years ahead.
“We will continue to strengthen our enterprise risk management capabilities to ensure the sustainability of our business, while modelling our governance practices to align with international best practices”, said Chike-Obi.
Unlike most of the other lenders, Fidelity Bank Plc.’s earnings took a hit from the pandemic-induced storm in financial year 2020, with almost all income lines posting negative growth.
Analysts at Meristem Securities spotted contractions in both interest income and non-interest income saw to the 5.42% year on year decline in gross earnings, reported at N206.20 billion.
Analysts said a combination of factors was responsible for the decline in interest income, despite the 26.50% year on year increase in interest earning assets to N2.058 trillion.
It was noted the low yield environment adversely impacted income from investment securities.
Similarly, the reduction of interest on the Central Bank’s intervention funds had a negative effect on interest income, as about 23% of the bank’s risky assets are funded by intervention funds.
Furthermore, the regulatory reduction of transaction charges induced the 21.41% year on year decline in fee related income.
Consequently, non-interest income went south by 11.21%.
“An improvement in the yield environment as well as Management’s indication of the possibility of loan repricing should redirect interest income northward in 2021.
“Also, growth in transaction volumes across the bank’s digital channels should bode well for fee related income. We therefore anticipate a 11.86% rebound in gross earnings to N230.67 billion for 2021”, Meristem stated.
In the first quarter of 2021, the bank earnings performance came stronger amidst sluggish economic recovery in Nigeria market.
Fidelity Bank profit before tax jumped by 53.03% to N10.1 billion from N6.6 billion posted in the comparative period in financial year 2020.
Fidelity Bank Records Sky-High Earnings Jump in Q1-2021
This happened as the bank’s gross earnings increased by 7.7% year on year to N55.1 billion on account of 66.7 per cent growth in non-interest revenue to N12.1 billion from N7.2 billion in Q1-2020.
Fidelity Bank Reiterates Plan to Pursue Tier-1 Capital Identity
