Fidelity Bank Plc delivered strong topline growth in the first nine months of 2025, driven by improved asset pricing, expanding digital income streams, and solid balance-sheet expansion. However, bottom-line performance faced pressure from derivative-related losses triggered by the recent appreciation of the naira, underscoring the volatility inherent in Nigeria’s evolving foreign exchange environment.
Revenue growth
Gross earnings rose sharply by 44.3 percent year-on-year to N1.115 trillion, up from N772.5 billion in the corresponding period of 2024. This performance was underpinned by a 38.8 percent increase in interest income and a remarkable 102.8 percent surge in non-interest revenue.
Growth in interest income reflected improved pricing of loans and investment securities, with yields on earning assets expanding by 110 basis points to 19.0 percent.
Meanwhile, the bank’s diversified revenue base was highlighted by the spike in non-interest income, which benefited from higher FX-related earnings, trade finance income, digital banking revenues, and account maintenance charges.
Net interest income increased by 20.1 percent to N565.3 billion, up from N470.5 billion in the prior year. However, rising funding costs weighed on margins; average funding costs climbed by 210 basis points to 7.1 percent, reflecting slower repricing of deposit rates in a declining interest rate environment.
Consequently, the net interest margin (NIM) compressed by 100 basis points to 11.0 percent, indicating margin pressure despite strong asset yields.
Profitability challenges
Despite robust revenue growth, profit before tax declined by 4.7 percent year-on-year. This dip was largely attributed to a N60 billion loss on derivative contracts, particularly swap transactions, following the naira’s recent appreciation. This outcome highlights the sensitivity of bank earnings to FX market movements and the complexities of hedging strategies in a volatile currency environment.
Operating costs reflect inflation and regulatory pressures
Operating expenses rose by 45.0 percent to N344.3 billion, driven by a high-cost operating environment and increased regulatory charges linked to the bank’s expanding balance sheet.
Key cost drivers included technology investments, AMCON levies, deposit insurance premiums, staff costs, and repairs, which together accounted for roughly 70 percent of the increase in operating expenses. These rising costs continue to pose a challenge to profitability, even as the bank invests in digital infrastructure and scale.
Balance sheet and asset quality
Total deposits grew by 16.8 percent year-to-date to N6.9 trillion, supported by an 18.8 percent rise in low-cost funds across demand, savings, and domiciliary accounts.
In contrast, tenured deposits declined by 8.6 percent, reflecting a deliberate strategy to rebalance funding toward cheaper sources. The retail banking segment recorded an 8.3 percent increase in savings deposits to N1.2 trillion, positioning the bank for another year of double-digit savings growth.
Net loans and advances increased by 10.5 percent year-to-date to N4.8 trillion, signaling sustained credit expansion. Asset quality also strengthened, with the cost of risk improving to 0.4 percent and the non-performing loan (NPL) ratio declining to 2.2 percent from 3.1 percent at full-year 2024 well below the regulatory threshold.
Liquidity and outlook
Regulatory ratios remained comfortably above minimum requirements. The liquidity ratio improved to 51.7 percent from 46.6 percent, while the capital adequacy ratio stood at 16.1 percent.
These buffers provide significant headroom for continued growth and support investor confidence amid Nigeria’s ongoing banking sector recapitalization.
Fidelity Bank continues to consolidate its position as Nigeria’s sixth-largest bank, supported by a rapidly expanding digital-led retail franchise and a strong SME focus. Its UK subsidiary enhances cross-border capabilities and earnings diversification, while digital channels now account for over 92 percent of customer-induced transactions.
Looking ahead, sustained revenue growth, improving asset quality, and a stable capital position provide a solid foundation. However, profitability will hinge on effective cost control, careful management of FX and derivative exposures, and continued optimization of funding costs. As macroeconomic conditions stabilize, Fidelity’s diversified business model positions it to deliver resilient earnings over the medium term.