Fidelity Bank Plc has announced a pre-tax profit of N385.215 billion for the 2024 financial year that ended December 31, marking an impressive 210.01% year-on-year (YoY) growth.
Despite a windfall tax of N13.333 billion, post-tax profit surged by 179.63% to N278.106 billion.
According to the audited financial statement, gross earnings grew by 87.72% to N1.043 trillion, with core operational income contributing about 97% of total revenue.
The Board has proposed a final dividend of N1.25k per share (up from N0.85k in 2023), payable on April 29, 2025.
This brings the total dividend for 2024 to N2.10k per share, including the N0.85k interim dividend, to be paid from retained earnings.
Key highlights (2024 vs. 2023)
- Gross earnings: N1.043 trillion +87.72% YoY
- Interest Income: N950.588 billion +106.85% YoY
- Interest Expense; N320.818 billion +76.11% YoY
- Net interest income; N629.770 billion +127.05% YoY
- Credit loss expense: N56.441 billion; -16.30% YoY
- Net interest income after credit loss expense: N573.329 billion +173.11% YoY
- Fees and commission income: N78.355 billion +57.97% YoY.
- Fees and commission expense: N8.043 billion -31.91% YoY
- Foreign exchange revaluation gains: N11.716 billion, -73.43% YoY
- Profit for the period N278.106 billion +179.63% YoY.
- Earnings per share N6.65; +113.83% YoY
- Loans and advances to customers N4.387 trillion +41.87%.
- Cash and Cash equivalents N707.450 billion; +94.26%
- Total Assets N8.822 trillion +41.49%.
- Customers’ deposits N5.937 trillion +47.88%.
- Shareholders’ funds: N897.874 billion; 105.32YoY
Cursory analysis
Interest income dominance
Fidelity Bank’s earnings structure remained heavily reliant on interest income, which accounted for 91% of total revenue. This was primarily driven by:
- Interest income from loans and advances to customers (66% contribution).
- Interest income from investments in securities (17.19% contribution).
Notably, the contribution from loans declined, while investment in securities increased. While loans and advances grew by N1.2 trillion, investment in securities expanded significantly to N1.55 trillion, adding N733.544 billion in 2024.
Higher interest margin & deposit growth
- The interest expense to interest income ratio declined to 33.8% from 39.6% in 2023, reflecting a wider spread between income and cost.
- Despite a 56% increase in interest expenses on customer deposits (N212.7 billion), Fidelity’s strong interest margin supported a robust net interest income.
- Additionally, the bank attracted N1.922 trillion in new deposits while raising N352.567 billion in debt, further strengthening its liquidity position.
Credit losses & asset quality
The bank suffered higher credit losses, reflecting a risky lending environment for Nigerian banks. According to details contained in its financials, total credit loss expense declined to N56.441 billion, with 91.47% (N51.63 billion) linked to loans and advances.
However, 73.46% of these loans were classified under Stage 3 Expected Credit Loss (ECL). Credit losses are loan provisions undertaken by banks to cater for loans that they consider might go bad. Stage 3 loans are typically loans in bad shape.
Despite this, the net interest income after providing for bad loans remained strong, supported by net fees and commission income of N70.312 billion contributed to the strong pre-tax profit.
Fidelity Bank’s increase in commission and fees was driven by letters of credit commission and fees (N9.47 billion), ATM charges (N6.4 billion) and commission on travelers’ cheques and foreign bills (N6.9 billion).
The bank recently launched ‘Fidelity Send’, a real-time payment platform powered by MasterCard, that enables individuals and businesses to send and receive money quickly and securely. The bank takes a cut on such transactions.
Capital position & shareholder returns
- Fidelity’s shareholders’ funds surged by 105.32%, driven by an expansion in share capital and premium accounts, which rose 133.58% to N305.555 billion.
- This suggests that Fidelity is making significant progress toward meeting the CBN’s N500 billion new capital requirement.
- Notably, on February 7, 2025, the bank announced the successful completion of its public offer and rights issue and is poised to go back to the market.
