Fidelity Bank Posts N385.2bn Profit in 2024, Boosted by Interest Income

Fidelity Bank Plc has posted a record-breaking pre-tax profit of N385.2 billion for the 2024 financial year, reflecting an impressive 210.01% year-on-year (YoY) growth.

Despite a N13.3 billion windfall tax, the bank’s post-tax profit surged by 179.63% to N278.1 billion, highlighting its resilience and strong operational efficiency.

The bank’s gross earnings crossed the N1 trillion mark, growing by 87.72% YoY to N1.043 trillion, with core operational income contributing 97% of total revenue, according to its audited financial statement.

Fidelity Bank’s strong financial performance has translated into higher returns for shareholders. The Board has proposed a final dividend of N1.25 per share, bringing the total dividend for 2024 to N2.10 per share, including the N0.85 interim dividend. The final dividend is set for payment on April 29, 2025.

A deep dive into the bank’s performance reveals that interest income remains the backbone of its revenue, accounting for 91% of total earnings.

According to financial analyst, Dr. Tunde Adeyemi, this shift aligns with a cautious banking strategy: “With Nigeria’s high-interest rate environment, banks are optimizing returns by increasing investment in risk-free securities rather than aggressively expanding their loan portfolios.”

Fidelity Bank reported a 47.88% YoY increase in customer deposits, reaching N5.937 trillion. The bank also raised N352.6 billion in debt, further strengthening its liquidity position.

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Financial expert, Mrs. Olubunmi Adebayo, noted that the bank’s deposit strategy is a testament to growing customer confidence: “Fidelity’s ability to attract nearly N2 trillion in new deposits amid economic uncertainties underscores its strong brand trust and efficient banking operations.”

Despite the bank’s strong profitability, its credit loss expense stood at N56.4 billion, with 91.47% (N51.6 billion) tied to loans and advances. More critically, 73.46% of these loans were classified as Stage 3 Expected Credit Loss (ECL), indicating potential bad loans.

However, risk management expert, Mr. Adewale Ige, downplayed concerns, emphasizing that: “Fidelity’s proactive provisioning for bad loans ensures that its financial stability remains intact, even as it navigates Nigeria’s challenging lending environment.”

The bank’s digital push has also contributed to revenue growth, with the launch of ‘Fidelity Send’, a real-time payment platform powered by Mastercard. This innovation aligns with Fidelity’s strategy to diversify income streams beyond traditional banking.

Fidelity’s shareholders’ funds surged by 105.32%, reaching N897.9 billion—a clear indicator of the bank’s commitment to meeting the Central Bank of Nigeria’s (CBN) N500 billion recapitalization requirement.

The bank recently completed a public offer and rights issue and is expected to return to the market for additional capital raise.

Investment strategist, Mr. David Eze, remarked: “Fidelity’s impressive capital growth signals strong investor confidence and positions it well for the next phase of banking sector consolidation.”