Fidelity Bank Plc said its Profit Before Tax (PBT) grew by 53.9 per cent from N6.6 billion in 2020 to N10.1billion for the corresponding period of March 31, 2021.
Details of the unaudited results, released at the Nigerian Stock Exchange (NSE) show that Net revenue in the period increased by 13.4per cent from N30.3billion in the first quarter 2020 to N34.4billion in 2021, just as the bank recorded growth in other performance indices.
Managing Director/Chief Executive Officer of Fidelity Bank Plc, Nneka Onyeali-Ikpe, while commenting on the results, stated that, “We commenced the year showing impressive double-digit growth in profitability and improved performance across key efficiency indices whilst ensuring our business model continued to deliver strong positive results in line with our guidance for the 2021 financial year.
“Gross Earnings increased by 7.7per cent Year on Year (YoY) to N55.1billion on account of 66.7per cent growth in non-interest revenue to N12.1billion from N7.2billion in first quarter of 2020. In absolute terms, the increase in NIR came from FX related income, digital banking income and account maintenance charge etc. as total customers’ induced transactions across all our service channels increased by 30.4per cent YoY and 17.1per cent Quarter on Quarter (QoQ.
“Net Interest Margin remained unchanged at 6.3per cent compared to 2020 Full Year (FY) as the drop in average funding cost offset the decline in average yields on earning assets.
“Average funding cost dropped to 2.5per cent from 3.6per cent in 2020 FY due to a combination of improved deposit mix and a slight moderation in average borrowing cost.
“This led to 26.2per cent decline in total interest expenses, which translated to 17.1per cent increase in net interest income to N28.8billion despite a 4.3per cent increase in interest bearing liabilities. We refinanced our 7-Year N30.0billion Tier II Bonds issued in 2015 at 16.48per cent p.a. with cheaper 10-Year N41.2billion Tier II Bonds priced at 8.5per cent p.a., which led to a 61bpts drop in average borrowing cost to 4.5per cent,” she said.
According to her, the Bank’s Operating Expenses increased by N1.3billion (6.2 per cent) to N23.0billion largely driven by N4.3billion growth in regulatory charges (NDIC & AMCON Charges).
Excluding the increase in regulatory charges, she noted that total operating expenses would have dropped by 13.8per cent (6.1per cent QoQ) to N18.6billion from N21.6billion in the first quarter of 2020 (first quarter of 2020: N19.8billion).
According to her, Total Deposits increased by 3.1per cent Year To Date ( YTD) to N1,751.3billion from N1,699.0billion in 2020 FY, driven by 5.5per cent increase in low cost deposits (Demand: 6.2per cent, Savings: 4.1per cent).
Foreign currency deposits increased by 15.7per cent YTD (N46.9 billion) and now accounts for 19.7per cent of total deposits from 17.5per cent in 2020 FY, as we harness the benefits of our renewed drive in Diaspora Banking as well as the recent CBN Naira-for-Dollar Incentive Scheme for diaspora remittances to Nigeria.
Retail Banking continued to deliver impressive results as savings deposits increased by 4.1per cent YTD to N441.6billion and we are on course to achieving the 9th consecutive year of double-digit growth in savings deposits. Savings deposits was responsible for 32.9per cent of the absolute growth in total deposits and now accounts for 25.2per cent of total deposits compared to 25.0per cent in 2020.
Net Loans and Advances increased by 7.6per cent YTD to N1, 426.3billion from N1, and 326.1billion in 2020 FY.
However, the actual growth was 6.8per cent while the impact of the currency adjustment (2020 FY: N400.3/$ – first quarter of 2021: N407.6/$) accounted for a 0.8per cent YTD growth in the loan book. Cost of risk came in at 0.4per cent and the NPL ratio dropped to 3.6per cent from 3.8per cent in 2020 FY.
Other Regulatory Ratios remained above the required thresholds with liquidity ratio at 33.9per cent and Capital Adequacy Ratio (CAR) at 18.4per cent from 18.2per cent in 2020 FY.
Onyeali-Ikpe said, “We are committed to sustaining our growth trajectory and achieving the long-term strategic aspirations of the Bank as we look forward to delivering another set of good results in the next quarter.
