Fidelity Bank Plc plans to grow its retail accounts to three million and deepen its deposit base by 20 per cent by the end of this year as it pursues a short-term strategy that focuses on underserved consumer banking segment and small businesses.
Managing director, Fidelity Bank Plc, Mr. Nnamdi Okonkwo, yesterday at the Nigerian Stock Exchange (NSE) outlined the growth strategy and targets of the bank at a “Fact Behind the Figure” presentation to explain the underlying trends in the bank’s performance to the investing community.
According to him, the bank is leveraging on emerging consumer credit bureaus and bank-wide risk management framework to provide loan products to grossly underserved consumer banking segment.
He said the bank would be deepening its retail banking in growing its business in 2014 noting that the target is to grow retail accounts to three million accounts across 230 branches by the end of 2014.
He pointed out that the bank would focus on strengthening its strategic alliances with various institutions including schools, microfinance banks and supermarkets to increase retail customers’ base.
He added that the bank is starting aggressive deployment of smaller, cheaper, easily accessible and available branches that will focus on cheap deposit mobilization while it would also strengthen its lending and deposit mobilization in the Small Medium Enterprises (SMEs) and retail segments.
“We offer these SME’s advisory services in terms of financial, technology and human resources solution. There are a lot of concerns in these risk areas in the past but the future and success of banking in future goes to the retail and I assure you that we are taking steps to prepare ourselves. We are leaving a lot of returns for the customers because we don’t want to take risk. We have built capacity on this and we have put in place product and proper pricing to improve our bottom-line. We have put in a lot of resources. We are deploying customer relationship management system and business analytics tools to gain deeper customer insights and increased penetration ratio for our branded retail and electronic products,” Okonkwo said.
He outlined that the bank would continuously increase its operating efficiency through consistent business processes while extending the leverage on the value chain of its corporate banking to extract maximum value from the commercial and retail businesses to achieve a 50:50 loan split between corporate and commercial loan.
According to him, the bank is targeting between 15-20 per cent on tax rate, 20 per cent average on deposit growth, 15-20 per cent average on loan growth, 30-35 per cent on proposed dividend and 10 per cent growth on Return on investment (ROE).
He added that the bank would also deepen its participation in the fast-growing and key sectors of the economy especially energy, oil and gas and telecommunications by leveraging its enhanced balance sheet and expanded distribution network.
“If anybody is interested in buying a stock that shows consistent return, stable management, stable liquidity and increased capital base, it is a good time and now to buy Fidelity bank stock because we are taking this bank somewhere,” Okonkwo said.
He blamed the decline in the bank’s net bottom-line in 2013 on increased costs and constrained income sources noting that a clawback of N4.4 billion on previously sold loans to Asset Management Company of Nigeria (AMCON) and increased levy due to AMCON as well as a one -off additional provision of N1.8 billion in respect of actuarial valuation on gratuity and pension obligation negatively impacted profit.
