Fidelity Bank Plc has demonstrated an impressive average annual profit growth of 64 percent over the last three years, showcasing its resilience as one of Nigeria's fastest-growing companies.
The bank has also experienced substantial growth in its
customer base and assets, with its total balance sheet expanding from N2.1
trillion to N6.2 trillion, making it the sixth largest in the Nigerian banking
sector. This growth was primarily driven by a total deposit exceeding N4
trillion, which is also the sixth largest in the industry.
An analysis of Fidelity Bank's audited reports and accounts
from 2023 to 2020 revealed consistent double-digit growth rates, with
cumulative average annual growth rates in earnings, profitability, and assets
significantly surpassing the industry average and ranking among the
best-performing publicly quoted companies.
The 64 percent average annual profit growth rate highlights
Fidelity Bank's solid foundation as an inflation-hedging investment.
The bank's operational growth enhances its overall return
prospects, with its share price delivering an average annual capital gain of
over 100 percent in the past five years on the stock market.
Numerous expert reviews have emphasized that the bank's
impressive historical performance is a key attraction for its ongoing combined
rights and public offer.
Fidelity Bank has announced a rights issue of 3.2 billion
ordinary shares of 50 kobo each at N9.25 per share, as well as an offering of
10 billion ordinary shares of 50 kobo each to the general investing public at
N9.75 per share.
The acceptance and application lists for both the rights
issue and public offer opened on Thursday, June 20, 2024, and are set to close
on Monday, July 29, 2024. The rights issue has been pre-allotted on the basis
of one new ordinary share for every 10 existing ordinary shares held as at the
close of business on Friday, January 05, 2024.
Fidelity Bank's gross earnings have shown consecutive
growth, from N206 billion in 2020 to N251 billion, N337 billion, and N556
billion in 2021, 2022, and 2023 respectively, with an average annual growth of
39 percent. Profit before tax has also increased consecutively from N28 billion
in 2020 to N124 billion in 2023, while profit after tax rose from N26.65
billion in 2020 to N99.45 billion in 2023. Earnings per share has similarly
grown from 92 kobo in 2020 to N3.11 in 2023, indicating potential for increased
dividends to shareholders.
The bank's profitability has been fueled by a continuous
increase in market share, a strong commitment to national economic growth,
support for businesses, and high customer trust.
Fidelity Bank’s total assets has grown successively from
N2.11 trillion in 2019 to N2.76 trillion in 2020 and consecutively to N3.28
trillion, N3.99 trillion and N6.23 trillion in 2021, 2022 and 2023
respectively. Shareholders’ funds have also grown successively from N234.03
billion in 2019 to N273.53 billion, N285.29 billion, N314.36 billion and
N437.31 billion in 2020, 2021, 2022 and 2023 respectively.
Total deposit has grown by an average annual growth of 33
per cent from N1.7 trillion in 2020 to N4.02 trillion in 2023. A breakdown
underlined a strong customer confidence with low-cost deposit accounting for
97.4 per cent of total deposit.
Low-cost deposit has grown at a faster CAGR of 44 per cent
over the period, rising from N1.31 trillion in 2020 to N3.91 trillion in 2023.
Savings accounts had also doubled over the period from N424 billion in 2020 to
N881 billion in 2023, representing average annual growth rate of 28 per cent.
Fidelity Bank boasts over 8.0 million customers, with 5.1
million utilizing digital channels, highlighting the bank’s robust information
and communication technology.
As the bank continues to gain the trust of its customers, it
has also demonstrated a strong commitment to national economic growth, with an
average annual growth of 32 percent in net loans. The net loans have seen
significant growth, increasing from N1.32 trillion in 2020 to N1.66 trillion,
N2.12 trillion, and N3.09 trillion in 2021, 2022, and 2023, respectively.
This substantial growth in loans reflects Fidelity Bank’s
unwavering support for Nigerian businesses, making it the fifth largest loan
portfolio in the Nigerian banking industry. Dr. Kamoru Yusuf, Founder of KAM
Holding and a customer of the bank, commended Fidelity Bank for its exceptional
support in the development of Nigerian companies.
Yusuf, whose group has evolved into a global business
conglomerate operating in three countries across two continents, affirmed that
KAM Holding has greatly benefited from financial assistance from Fidelity Bank.
He emphasized that investing in Fidelity Bank would contribute to the growth of
the Nigerian economy and companies like KAM Holding, the nation’s largest
wholly indigenous metal and steel production company.
He highlighted the correlation between increased capital for
a business-focused bank like Fidelity Bank and the overall development of the
Nigerian economy. There are strong indications that the bank will maintain its
impressive growth trajectory in the years to come.
The interim report and account of the bank for the first
quarter ended March 31, 2024 already demonstrated that the bank has started the
current business year on a stronger footing with three-digit growths across key
performance indicators.
The bank's financial report for the first quarter of 2024
revealed a significant increase in gross earnings, reaching N192.1 billion,
representing an 89.9% growth. This growth was driven by a strong performance
across various income streams, with interest income rising by 90.7% and
non-interest income growing by 84%.
The surge in interest income was attributed to a favorable
yield environment and a robust earning assets base, while the boost in
non-interest income was fueled by double-digit growth in account maintenance
charges, forex-related income, trade, banking services, and remittances,
supported by increased customer transactions.
Furthermore, the bank's profit before tax doubled to N39.5
billion in the first quarter of 2024, marking a 120% increase from the same
period in 2023.
This impressive performance was underpinned by an expanding
market share, as total deposits surged by 17% to N4.7 trillion within the
three-month period, compared to N4 trillion at the end of 2023.
Additionally, the bank intensified its support for national
economic growth, with net loans and advances rising by 21% to N3.7 trillion by
March 2024, up from N3.1 trillion at the end of 2023.