The upgrade, announced on Thursday, is a direct result of several key factors. Paramount among these is Fidelity Bank's highly successful capital raise in 2024, achieved through a rights issue and public offer. This capital injection, which was notably oversubscribed, has significantly bolstered the bank's financial base. Furthermore, an improvement in profitability, driven by higher interest income and a stable foundation of low-cost current and savings deposits, played a crucial role in Fitch's decision.
In 2024, Fidelity Bank embarked on a strategic capital-raising initiative, offering a combined 10 billion ordinary shares via a public offer and 3.2 billion ordinary shares through a rights issue. The overwhelming investor response, leading to an oversubscription of the combined offer, speaks volumes about market confidence in the bank's trajectory.
Dr. Nneka Onyeali-Ikpe, Managing Director and Chief Executive Officer of Fidelity Bank, expressed her satisfaction with the rating upgrade, stating, "This upgrade by Fitch Ratings affirms the resilience of our business model, the strength of our risk management practices, and our unwavering focus on delivering sustainable value to stakeholders." She emphasized the bank's continued strong asset quality, solid profitability, and ample liquidity, despite a challenging macroeconomic environment. This recognition, she added, reinforces Fidelity Bank's position as one of Nigeria's most resilient and customer-focused financial institutions.
A significant driver of the improved rating is the bank's enhanced capitalisation. Fitch's report highlights that Fidelity's Fitch Core Capital ratio surged to an impressive 29.9% at the end of 2024, comfortably exceeding the regulatory minimum. The agency also anticipates further capital-raising efforts, which are expected to position the bank well to meet the new ₦500 billion minimum capital requirement for internationally licensed banks before the 2025 deadline.
Fidelity Bank continues to maintain a strong market positioning within the Nigerian banking landscape. As the sixth-largest bank in Nigeria, it commands approximately five percent of the total banking sector assets. The bank's balance sheet is further strengthened by a substantial proportion of low-cost deposits, which constituted 93% of total deposits as of year-end 2024, providing a stable and cost-effective funding base.
This affirmation and upgrade by Fitch are expected to significantly enhance investor confidence in Fidelity Bank. This positive development will undoubtedly support the bank's ongoing efforts to expand its operations, both domestically and internationally, as it continues to solidify its position as a key player in the Nigerian financial sector.