Nigerian Exchange Limited (NGX) has announced the reclassification of Fidelity Bank Plc from small-price stock to medium-price stock.
Rule 15.29 of the Rulebook of The Exchange, 2015 (Dealing Members’ Rules) notes that equities priced above N5 per share for at least four of the most recent six months of trading, or new security listings priced above N5 per share at the time of listing on NGX are Classified as medium price stock.
According to NGX, Fidelity Bank Plc traded above the N5.00 mark on 20 February 2023 and remained above the N5 mark up until the close of business on 30 June 2023.
- “This indicates that Fidelity Bank has been trading above N5 for at least four (4) months in the last six (6) months. Therefore, it should be reclassified from small-price stock to medium-price stock,” NGX said.
Fidelity Bank’s Impressive Performance
Nairametrics reported recently that Fidelity Bank has continued to record impressive performance across key income and balance sheet lines.
In 2022, the Tier-2 bank posted a 5-year record growth of 113% YoY in profit before tax.
A review of the bank’s 2022 FY audited financials showed the bank’s profit before tax hit N53.677 billion, the highest in five years and higher than its peer’s (FCMB) PBT of N38.570 billion for the same period. Not all.
The record PBT figure surpassed the 2022 FY target of N48 billion. Looking at its Q1 2023 results, it is most likely it will beat the 2023 guidance. The Tier-2 bank recorded a 74% QoQ growth in PBT to N17.94 billion.
On the back of the impressive performance, the bank has proposed the payment of a final dividend of 40 kobos per share for 2022FY to be paid on May 23, 2023, for members that appear on the Register of Members on May 15, 2023.
Earnings Growth and Gross Earnings
One of the key reasons driving earnings growth is the impressive growth in gross earnings fueled by reasonable growth in interest and similar income.
For instance, in 2022FY, the bank recorded a 34.40% growth in Gross Earnings YoY to N337.05 billion, slightly above FCMB’s 33.47% YoY (N282.982 billion).
While the growth in gross earnings was driven by 45.2% growth in interest and similar income to N295.578 billion, the increase in interest income was led by a combination of improved yield on earning assets and 19.1% YoY expansion in earning assets to N2.64 trillion.
This trajectory was sustained in Q1 2023, with gross earnings up 42% to N101 billion buoyed also by a 43% growth in interest and similar income but unlike in 2022, the growth in interest income in Q1 was driven more by improved yield on loans than expansion. In Q1 2023, the bank expanded its loan book by N45.236 billion compared to N167.588 billion in Q1 2022.