Fidelity Bank Plc reported Profit Before Tax (PBT) of N25.1 billion for its half-year (H1) 2022 operations, up from N20.6 billion for the same period in 2021, despite a challenging operating environment.
In particular, a review of the bank’s half-year results revealed that PBT jumped by 21.6%, from N20.6 billion to N25.1 billion, while gross earnings rose by 37.9%, from N154.8 billion, thanks to a gain of 52.9% in interest income.
The bank claims that the increase in interest income was caused by an increase in the yield on earning assets and a 14.9% YTD expansion of the earnings base to N2.54 trillion.
Similarly, the bank’s net interest margin increased from 4.7% in 2021 to 6.4% in 2022 as a result of lower average financing costs and higher average rates on earning assets.
Additionally, the bank’s average yields on earning assets rose by 211 basis points to 11.5%, while its average financing cost decreased by 84 basis points to 4.0%, resulting in a growth of 50.4% in net interest income to N75.6 billion.
The bank’s total deposits increased by 13.1% to N2.29 trillion thanks to low-cost deposits, which saw double-digit growth.
The bank’s directors are proposing an interim dividend of 10 kobo per share based on the improved performance, in accordance with the authority granted to them by Section 426 of the Companies and Allied Matters Act (CAMA 2020), marking the first time the bank has paid an interim dividend in its 34-year history.
At the following AGM, this will be put before shareholders for approval. A 10% withholding tax, which will be subtracted prior to payment of the interim dividend, is subject to payment.
The bank’s CEO, Mrs. Nneka Onyeali-Ikpe, commented on the results, saying: “We are thrilled with our H1, 2022 performance, which demonstrated excellent growth across key performance metrics.”
She claims that as the bank optimizes its balance sheet and accumulates a sizable stock of reliable low-cost deposits, customer transactions have increased significantly due to increased efficiency and customer experience across its network.
Onyeali-Ikpe provided the following statement regarding the potential acquisition: “We recently executed a binding agreement for the acquisition of 100.0% equity ownership in Union Bank UK Plc in accordance with our strategic objectives and business expansion strategy.
“Union Bank UK offers a compelling synergy we hope to expand on, to develop a scalable and more sustainable service franchise that will support the larger ecosystem of our trade enterprises and diaspora financial services,” the company said.