Fidelity Bank Plc has recorded an average annual profit growth of 64 percent over the past three years, underlining its resilience as one of Nigeria’s fastest-growing companies.
The bank has also seen rapid expansion in customer base and assets as total balance sheet size leapt from N2.1 trillion to N6.2 trillion, the sixth largest in the Nigerian banking industry. The balance sheet was driven by a hefty total deposit of more than N4 trillion, equally the sixth biggest in the industry.
A review of the audited reports and accounts of Fidelity Bank between 2023 and 2020 showed double-digit growths over the years with Cumulative Average Annual Growth Rate (CAGR) in earnings, profitability, and assets significantly above average industry rate and within the best performance among publicly quoted companies.
The average annual profit growth rate of 64 percent underscores Fidelity Bank’s fundamental strength as an inflation-hedging investment. The operational growth strengthens the overall return outlook of the bank, whose share price has delivered an average annual capital gain of more than 100 percent in five years at the stock market.
Several experts’ reviews have said the bank’s strong historical performance is a major attraction for its ongoing combined rights and public offer.
Fidelity Bank is offering a rights issue of 3.2 billion ordinary shares of 50 kobo each at N9.25 per share. The bank is also simultaneously offering 10 billion ordinary shares of 50 kobo each to the general investing public at N9.75 per share.
The acceptance and application lists for the rights issue and public offer, which opened on Thursday, June 20, 2024, are scheduled to close on Monday, July 29, 2024. The rights issue has been pre-allotted based on one new ordinary share for every 10 existing ordinary shares held as of the close of business on Friday, January 05, 2024.
Fidelity Bank’s gross earnings rose successively from N206 billion in 2020 to N251 billion, N337 billion, and N556 billion in 2021, 2022, and 2023 respectively, representing an average annual growth of 39 percent. Profit before tax has grown consecutively from N28 billion in 2020 to N124 billion in 2023. Profit after tax jumped from N26.65 billion in 2020 to N99.45 billion in 2023. Earnings per share has also grown from 92 kobo in 2020 to N3.11 in 2023, showing the headroom for increased dividends to shareholders.
The bank’s profitability has been driven by continuous increases in market share, a strong commitment to national economic growth with support for businesses, and high customer trust.
Fidelity Bank’s total assets have grown successively from N2.11 trillion in 2019 to N2.76 trillion in 2020 and consecutively to N3.28 trillion, N3.99 trillion, and N6.23 trillion in 2021, 2022, and 2023 respectively. Shareholders’ funds have also grown successively from N234.03 billion in 2019 to N273.53 billion, N285.29 billion, N314.36 billion and N437.31 billion in 2020, 2021, 2022 and 2023 respectively.
Total deposits have grown by an average annual growth of 33 percent from N1.7 trillion in 2020 to N4.02 trillion in 2023. A breakdown underlined strong customer confidence with low-cost deposits accounting for 97.4 percent of total deposits.
Low-cost deposits has grown at a faster CAGR of 44 per cent over the period, rising from N1.31 trillion in 2020 to N3.91 trillion in 2023. Savings accounts had also doubled over the period from N424 billion in 2020 to N881 billion in 2023, representing average annual growth rate of 28 per cent.
Fidelity Bank has more than 8.0 million customers, with 5.1 million of these customers on digital channels, underlining the strength of the bank’s robust information and communication technology.
As customers increasingly entrust the bank with their funds, Fidelity Bank has also shown an equally aggressive commitment to national economic growth with average annual growth of 32 percent in net loans.
Net loans have grown successively from N1.32 trillion in 2020 to N1.66 trillion, N2.12 trillion, and N3.09 trillion in 2021, 2022, and 2023 respectively. The above-average growth in loans shows Fidelity Bank’s famed support for Nigerian businesses. The bank’s loan portfolio is the fifth largest in the Nigerian banking industry.
A frontline industrialist and a customer of the bank, Dr Kamoru Yusuf, Founder of KAM Holding, said Fidelity Bank has been exceptional in supporting the development of Nigerian companies.
Yusuf, whose group has metamorphosed into a global business conglomerate operating in three countries across two continents, confirmed that KAM Holding has benefited immensely from financial support from Fidelity Bank.
He said investing in Fidelity Bank will be an investment in the growth of the Nigerian economy and companies like KAM Holding, the nation’s largest wholly indigenous metal and steel production company.
He underlined the relationship between increased capital for a business-focused bank like Fidelity Bank and the overall development of the Nigerian economy.
There are strong indications that the bank will sustain its impressive growth record in the years ahead. Already, interim report and account of the bank for the first quarter ended March 31, 2024 showed that the bank started the current business year on stronger footing with three-digit growths across key performance indicators.
The three-month report showed that gross earnings increased by 89.9 percent to N192.1 billion in the first quarter of 2024. The bank’s top-line performance continued to be driven by broad-based growths across income lines with interest income rising by 90.7 percent and non-interest income growing by 84 percent in the first quarter of 2024.
Growth in interest income was primarily spurred by a higher yield environment and strong earning assets base, while the increase in non-interest income was led by double-digit growth in account maintenance charges, foreign exchange (forex)-related income, trade, banking services, and remittances, supported by increased customer transactions.
Profit before tax doubled by 120 percent to N39.5 billion in the first quarter of 2024 as against N17.9 billion in the first quarter of 2023. The bank’s performance was driven by expanding market share with total deposits rising by 17 percent within the three months to N4.7 trillion, compared with N4 trillion recorded at the end of 2023.
The bank also increased its support for national economic growth with net loans and advances rising by 21 percent from N3.1 trillion at the end of 2023 to N3.7 trillion by March 2024.
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