Fidelity Bank Plc has announced its unaudited results for the half year ended June 30, this year, showing that its deposit base grew to N829.9 billion from N769.6 billion in 2015 Financial Year (FY).
This represents a 7.8 per cent increase for the period under review. Also, the bank’s net loans rose impressively by 23 per cent from N578.2 billion to N711.0 billion, demonstrating its unwavering commitment towards supporting critical sectors of the economy. According to the lender’s financial statement for the period under review, the bank posted a decline of 2.6 per cent and 35 per cent in its gross earnings and Profit before Tax (PBT) respectively.
Whereas total assets increased by 13.5 per cent to N1, 397.9 billion from N1, 231.7 billion last year, total equity remained flat at N183.5 billion. While total expenses rose by 10 per cent to N31.7 billion from N28.8 billion in H1 2015, operating income increased to N43.6 billion from N42.0 billion in the preceding year, representing a 3.6 per cent rise.
Commenting on the result, its Managing Director/Chief Executive Officer, Nnamdi Okonkwo, said the lender’s financial performance is reflective of the general slowdown in business activities due to lower government revenues, which is a direct fallout of the free fall in international oil prices.
According to him, rising inflation rate, lower disposable income and tougher operating environment for most sectors of the economy as well as the impact of the devaluation on asset quality has all together impacted financial performance. “Despite the headwinds above, we continued with the disciplined execution of our medium term strategy and recorded decent growth on key operational metrics; deposits, loans, net interest income, electronic banking income and operating income,” Okonkwo explained.
The organic loan growth of 7.4 per cent was principally driven by on-lending facilities to the public sector. Cost of risk spiked to 1.4 per cent in first half of this year due to the N4 billion impairment charge taken in the second quarter of this year 2016.
“We have taken a very prudent view of the impact of the currency devaluation, tougher operating environment and declining consumer disposable income on selected sectors of our loan portfolio.
“Our other regulatory ratios (Liquidity Ratio / CAR) remained above the set thresholds though capital adequacy ratio declined to 16.3 per cent principally driven by the growth in our loan book and other earning assets,” it said.
