Fidelity Bank profit before tax increases by 53.03% in Q1

Fidelity Bank Plc has announced a profit before tax of N10.1 billion for the first quarter (Q1) ended March 31, 2021The bank’s Managing Director/Chief Executive Officer, Mrs Nneka Onyeali-Ikpe, disclosed this in an unaudited financial results sent to the Nigerian Exchange Ltd., on Wednesday in Lagos.

Onyeali-Ikpe said that the profit before tax rose by 53.03 per cent to N10.1 billion from N6.6 billion posted in the comparative period of 2020.

Similarly, net revenue in the period increased by 13.4 per cent to N34.4 billion from N30.3 billion in Q1 2020.

The bank’s gross earnings increased by 7.7 per cent year-on-year to N55.1 billion on account of 66.7 per cent growth in non-interest revenue to N12.1billion from N7.2 billion in Q1 2020.

Commenting on the performance, Onyeali-Ikpe said the bank showed impressive double-digit growth in profitability.

“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.

“In absolute terms, the increase in nominal interest rate came from foreign exchange related income, digital banking income and account maintenance charge among others.

“Net interest margin remained unchanged at 6.3 per cent compared to 2020 full year as the drop in average funding cost offset the decline in average yields on earning assets,” she said.

According to her, average funding cost dropped to 2.5 per cent from 3.6 per cent in 2020 due to a combination of improved deposit mix and a slight moderation in average borrowing cost.

“This led to 26.2 per cent decline in total interest expenses, which translated to 17.1 per cent increase in net interest income to N28.8bn despite a 4.3 per cent increase in interest bearing liabilities.

“We refinanced our seven-year N30 billion Tier II bonds issued in 2015 at 16.48 per cent p.a. with cheaper 10-year N41.2 billion tier II bonds priced at 8.5 per cent p.a., which led to a 61bpts drop in average borrowing cost to 4.5 per cent,” she added.

Onyeali-Ikpe said that operating expenses increased by N1.3 billion (6.2 per cent) to N23 billion largely driven by N4.3 billion growth in regulatory charges.

“Excluding the increase in regulatory charges, total operating expenses would have dropped by 13.8 per cent to N18.6 billion from N21.6 billion in Q1 2020,” she said.

Onyeali-Ikpe also explained that retail banking continued to deliver impressive results for the bank as savings deposits increased by 4.1 per cent year-to-date to N441.6 billion.

“We are on course to achieving the ninth consecutive year of double-digit growth in savings deposits.

“Savings deposits were responsible for 32.9 per cent of the absolute growth in total deposits and now accounts for 25.2 per cent of total deposits compared to 25.0 per cent in 2020.

“Other regulatory ratios remained above the required thresholds with liquidity ratio at 33.9 per cent and capital adequacy ratio at 18.4 percent from 18.2 percent in 2020.

“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,” she said.