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Fidelity Bank is set for the league of top global banks following investors’ confidence and approval for its capital raising exercise aimed at sustaining the record breaking growth in performance indices achieved in its half year 2023, H1’23 financial results.
The bank’s financial statements for H1’23 published on the Nigerian Exchange Group (NGX) showed a 204.4 per cent growth in Profit Before Tax, PBT for the first half of 2023 to N76.3 billion.
The statements also showed a positive performance across all financial indices, reaffirming the Fidelity Bank’s position as one of the fastest growing and well-managed financial institutions in Nigeria.
Gross earnings for the period grew by 59.6 per cent to N247.1 billion from N154.8 billion reported in June 2022. Profit After Tax, PAT stood at N61.9 billion representing a growth of 166 per cent over N23.3 billion recorded in the corresponding period. This translates to Earnings per Share of 194 kobo. The Bank’s Net Loans & Advances grew by 25.1 per cent from N2.1 trillion recorded as of December 2022 to N2.6 trillion in June 2023 with corresponding growth in Customer Deposits which increased by 23.2 per cent to N3.2 trillion from N2.6 trillion in December 2022.
The Bank’s balance sheet remained strong with a 27.4 per cent growth in Total Assets from N3.9 trillion in December 2022 to N5.1trillion. The Bank’s non-performing loans remained low and within regulatory threshold at 3.24 per cent with adequate coverage of 111 per cent. Return on Equity (ROE) and Return on Assets (ROA) closed at 34.9 per cent and 2.8 per cent respectively.
On the back of the strong H1’23 performance, the board of the bank approved an interim dividend of 25 kobo per share making it the second consecutive year the bank would be paying interim dividends and another demonstration of its capacity to provide shareholders with sustainable value.
Commenting on the Bank’s performance, Nneka Onyeali-Ikpe, Managing Director/Chief Executive Office, Fidelity Bank Plc noted, “We are pleased to report on another period of quality growth across all financial and non-financial indices. Our performance during the first half of the year reflects the resilience of our bank and the fundamental strength of our business to deliver long-term sustainable value at a time that has been characterized by global economic headwinds. As a bank, we remain committed to our goal of helping individuals to grow, inspiring businesses to thrive and empowering economies to prosper.
“We will continue to monitor and proactively manage the evolving risks in the economy while ensuring our commitments to our customers and shareholders are fulfilled. The interim dividend of 25 kobo per share, a 150 per cent increase compared to the 10 kobo interim dividend in 2022FY, attests to the value we place on the unwavering support from our shareholders,” stated Onyeali-Ikpe.
The bank’s results in H1’23 comes to join a string of recent achievements by Fidelity Bank. It would be recalled that the Bank’s stock was reclassified from small-price stock to medium-price stock by the NGX in July 2023 on the back of a consistent impressive performance.
Similarly, the bank recently emerged as the company with the highest earnings per share on the NGX based on half year financial figures for the second year running.
Inspired by the stellar performance, shareholders of the Bank, at an Extraordinary General Meeting (EGM) held virtually last month unanimously approved a capital raising exercise via a Public Offer for up to 10 billion Ordinary Shares and Rights Issue of up to 3.2 billion Ordinary Shares representing one new share for every 10 shares held to new and existing shareholders respectively.
Addressing shareholders at the meeting, which had the representatives of various regulators in attendance, including the Central Bank of Nigeria, Nigeria Exchange Group and Securities and Exchange Commission, Chairman of Fidelity Bank Plc, Mustafa Chike-Obi, said the Bank is on a solid growth trajectory and requires additional capital for growth in profitability, domestic and international expansion and to enhance its digital capabilities.
“In terms of our financial performance, we are beginning to see the result of uncompromising commitment to the disciplined execution of our strategy and recorded double-digit growth on all major indices in 2022. Indeed, our performance in 2022 marked a significant milestone in the history of your company because, for the first time in 35 years of operation, we crossed the N50 billion mark in Pre-Tax Profits.
The resolutions proposed for approval at this meeting aimed to ensure that your company can take advantage of emerging business opportunities and secure long-term profitability and competitive advantage while ensuring increased shareholder value”, explained Chike-Obi.
Shareholders’ support
Several shareholders who spoke at the meeting commended the Bank’s leadership for its sterling performance and assured the board of their support for the capital raising exercise.
The Chairman Emeritus of the Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, said, “I appeal to my fellow shareholders not to miss the opportunity of increasing our holding in Fidelity Bank because the bank happens to have a future for shareholders. Moreso, the board is a listening one, and we appreciate this opportunity and would endeavour to encourage our colleagues to take the shares”.
On his part, the President, Association for the Advancement of the Rights of Nigeria Shareholders, Alhaji Faruk Umar, opined, “I’m glad that Fidelity Bank has approached the market, and it is probably one of the first banks to do so this season. I assure you that you will get all the support from us."
Efficiency & speed
Giving her remarks at the end of the meeting, the Managing Director/Chief Executive Officer of Fidelity Bank Plc, Mrs. Nneka Onyeali-Ikpe, said, “I want to assure our esteemed shareholders that the Management and the Board of Directors of Fidelity Bank will continue to drive the business and ensure that we add value to you. We noted all the encouragement and kind words and will not disappoint you. We would use all the technological platforms available to ensure efficiency and speed in concluding this capital raising exercise.”
Global expansion
With the target to become one of the country’s top five banks by 2025, Fidelity Bank is eyeing global expansion, with presence in six countries in the next three years.
Consequently, Fidelity Bank, earlier this year acquired the London unit of rival Union Bank of Nigeria Plc.
The bank also disclosed ongoing negotiation of another acquisition which it hopes to complete this year.
Speaking on the bank’s expansion move, Onyeali-Ikpe, said: “The strategy is for us to move footprint outside Nigeria and be able to compete favourably with our peers,”.
“In the next three years, we should be able to be in six countries by doing at least two every year”, she said in an interview with Bloomberg
Fidelity Bank is racing to expand and avoid losing out on fees from facilitating trade and corresponding banking roles to larger rivals.
Trade within the continent, which stands at more than $350 billion a year, is expected to grow by 52 per cent in the next decade according to the African Trade Policy Centre at the United Nations Economic Commission for Africa.
The Bank also plans to use the N13.8 billion it raised in a private placement earlier this year for the acquisitions, Onyeali-Ikpe said. The bank, which expects capital adequacy ratio at 19.1 per cent this year, will also use retained earnings to expand, she said
Fidelity’s private banking customers “want to do business and acquire properties in the UK and its environs and need our support,” Onyeali-Ikpe said, adding. “We’re expecting a lot of growth from the business opportunities, for ourselves and our customers.”