Details of the unaudited results, released at the Nigerian
Stock Exchange (NSE) show that Profit before Tax (PBT) grew by 53.9% from
N6.6bn in 2020 to N10.1bn for the corresponding period of March 31, 2021. Similarly, Net revenue in the period
increased by 13.4% from N30.3bn in Q1 2020 to N34.4bn in 2021, just as the bank
recorded growth in other performance indices.
Nneka Onyeali-Ikpe, MD/CEO of Fidelity Bank Plc commenting
on the results, stated that:
“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.
Gross Earnings increased by 7.7% YoY to N55.1bn on account
of 66.7% growth in non-interest revenue to N12.1bn from N7.2bn in Q1 2020. In
absolute terms, the increase in NIR came from FX related income, digital
banking income and account maintenance charge etc. as total customers’ induced
transactions across all our service channels increased by 30.4% YoY and 17.1%
QoQ.
Net Interest Margin remained unchanged at 6.3% compared to
2020FY as the drop in average funding cost offset the decline in average yields
on earning assets. Average funding cost dropped to 2.5% from 3.6% in 2020FY due
to a combination of improved deposit mix and a slight moderation in average
borrowing cost.
This led to 26.2% decline in total interest expenses, which
translated to 17.1% increase in net interest income to N28.8bn despite a 4.3%
increase in interest bearing liabilities. We refinanced our 7-Yr N30.0bn Tier
II Bonds issued in 2015 at 16.48% p.a.
with cheaper 10-Yr N41.2bn Tier II Bonds priced at 8.5% p.a., which led
to a 61bpts drop in average borrowing cost to 4.5%.
Operating Expenses increased by N1.3bn (6.2%) to N23.0bn
largely driven by N4.3bn growth in regulatory charges (NDIC & AMCON
Charges). Excluding the increase in regulatory charges, total operating
expenses would have dropped by 13.8% (6.1% QoQ) to N18.6bn from N21.6bn in Q1
2020 (Q4 2020: N19.8bn).
Total Deposits increased by 3.1% YTD to N1,751.3bn from
N1,699.0bn in 2020FY, driven by 5.5% increase in low cost deposits (Demand:
6.2% | Savings: 4.1%). Foreign currency deposits increased by 15.7% YTD
(N46.9bn) and now accounts for 19.7% of total deposits from 17.5% in 2020FY, as
we harness the benefits of our renewed drive in Diaspora Banking as well as the
recent CBN Naira-for-Dollar Incentive Scheme for diaspora remittances to
Nigeria.
Retail Banking continued to deliver impressive results as
savings deposits increased by 4.1% YTD to N441.6bn and we are on course to
achieving the 9th consecutive year of double-digit growth in savings deposits.
Savings deposits was responsible for 32.9% of the absolute growth in total
deposits and now accounts for 25.2% of total deposits compared to 25.0% in
2020.
Net Loans and Advances increased by 7.6% YTD to N1,426.3bn
from N1,326.1bn in 2020FY. However, the actual growth was 6.8% while the impact
of the currency adjustment (2020FY: N400.3/$ – Q1 2021: N407.6/$) accounted for
a 0.8% YTD growth in the loan book. Cost of risk came in at 0.4% and the NPL
ratio dropped to 3.6% from 3.8% in 2020FY.
Other Regulatory Ratios remained above the required
thresholds with liquidity ratio at 33.9% and capital adequacy ratio (CAR) at
18.4% from 18.2% in 2020FY.
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”.
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