By Kayode Tokede
Fidelity Bank plc has reported 7.6 per cent drop in profit before tax to N28.1billion in its audited result and accounts for full year ended December 31, 2020 from N30.4billion reported in 2019.
The Board has proposed a dividend per share of 22kobo subject to shareholders’ approval at the Annual General Meeting (AGM). The proposed dividend translates to an increase of 10 per cent from 20 kobo in 2019FY and a dividend yield of 9.4 per cent.
The lender on Wednesday in its profit and loss figures also reported Gross Earnings that dropped by 5.4per cent to N206.2billion from N218.0billion in 2019.
Other key financial parameters showed that Net Interest Income increased by 25.4per cent to N104.1billion from N83.1billion in 2019, while Net Revenue increased by 15per cent to N128.5billion from N111.8billion in 2019.
In the period under review, the bank reported 2,971 per cent impairment to N16.9billion from a write-back of N0.6billion in 2019.
However, the balance sheet position of Fidelity Bank showed Net Loans increased by 17.7per cent to N1,326.1billion from N1,127.0billion in 2019, while Total Deposits increased by 38.7per cent to N1,699.0billion from N1,225.2billion in 2019.
This brings total assets to N2.76trillion in 2020, 30.5 per cent increase over N2.11trillion reported in 2019.
MD/CEO of Fidelity bank, Nneka Onyeali-Ikpe stated that, “We are pleased with our financial performance, which clearly showed the resilience of our business model as core operating profit increased by 50.9per cent to N44.9billion from N29.8billion in 2019.
“We also saw a significant improvement in our efficiency indices as cost-to-income ratio moderated downward to 65.1per cent from 73.4per cent in 2019.
“However, Profit before Tax (PBT) dropped by 7.6per cent to N28.1billion as we proactively increased our provisions on risk assets to N16.9billion from a net write-back of N0.6billion in 2019. We took a conservative stance in recognition of the impact of the global pandemic, which has redefined business risks and opportunities in the new normal.
“Gross Earnings dropped by 5.4 per cent to N206.2billion due to a decline in interest & similar income as well as a drop in net fee income. Net fee income declined by N4.3billion largely due to the downward revision of fees in line with the new bankers’ tariff.
“Digital Banking income dropped by 18.8 per cent due to the revised banker’s tariff but it increased by 19.6 per cent QoQ on account of increased customer adoption as more services are migrated to our digital channels. We now have 52.8 per cent of our customers enrolled on the mobile/internet banking compared to 47.4 per cent in 2019, while 88.4 per cent of our customers’ transactions were done on the digital platforms.
“Retail Banking sustained its growth trajectory with 54.2 per cent (N149.2billion absolute) growth in savings deposits to N424.4billion from N275.2billion in 2019, making it the 8th consecutive year of double-digit growth in savings deposits.
“We successfully issued 10-year N41.2billion Tier II Local Bonds due 2031 at 8.5per cent coupon. The transaction was a landmark achievement in the Nigerian domestic debt market as the largest corporate bonds ever issued by any Nigerian Bank. It also validates the continued investors’ confidence in our long-term aspirations and strong corporate governance. Our 2020FY CAR does not include the newly issued bonds.”