recent years, with another set of impressive financial results.
Details of the Audited Half Year results ending June 30, 2020 for the
top Nigerian lender, released on the Nigerian Stock Exchange (NSE) on
Thursday, September 3, 2020, show strong growth in profits and other
indices.
The bank recorded a surge in Profit Before Tax of N12.0bn from N9.8bn in
2019, which translated to a 22% growth. Net profits for Fidelity Bank
grew by 33% from N8.5bn to N11.3bn in the reporting period. In other
indices, Total Assets rose by 13.7% from N2.1trillion in 2019 to
N2.4trillion this year whilst Total Deposits rose by 14.8% from
N1.2trillion to N1.4trillion during the same period.
Commenting on the results, Fidelity Bank CEO, Nnamdi Okonkwo said the
performance for the period, reflects 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 stated.
According to him, Fidelity Bank, re-stated its H1 2019 figures from
N15.1bn to N9.8bn 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 recognized 100% in our H1
2020 Accounts rather than been amortized over 12 months as was done
previously on our financials,” said the Fidelity CEO”. He further
revealed that, without implementing IFRIC 21, profit for the period
would have been N17.9bn compared to the N15.1bn 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 2019FY 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 chatbox 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” he explained.
Retail Banking in Fidelity Bank has continued to also deliver impressive
results. Savings Deposits in H1 2020 increased by 32.2% to N363.9bn 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 2019FY.
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 2019FY. Regulatory
Ratios however remained above the required thresholds with Capital
Adequacy Ratio increasing to 18.8% from 18.3% due to the capitalization
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.
