Fidelity Bank Declares 159% Increase in Profit to N159.8 Billion
- Fidelity Bank, a tier-two bank in Nigeria, reported an after-tax profit of 159% for the first half of 2024
- The bank's after-tax earnings rose from N61.9 billion at the same time last year to N159.8 billion
- Between July 2023 and September 2024, CBN raised interest rates from 18.75% to 27.25%
Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.
In the first half of 2024, Fidelity Bank, a tier-two bank in Nigeria, recorded an after-tax profit of 159%.
Source: UGC
In H1, the bank's after-tax profit increased to N159.8 billion from N61.9 billion during the same time the previous year, per the bank's financial statement that was made public on the Nigerian Exchange Group.
The bank announced a 107% increase in gross profits from N247.1 billion to N512.8 billion.
The repricing of apex bank assets and the high interest rate environment brought about by monetary policy rate hikes were responsible for this accomplishment.
In an effort to control inflation and stabilize the currency, the Central Bank of Nigeria (CBN) increased interest rates from 18.75% to 27.25% between July 2023 and September 2024. Bank interest income has increased as a result of this.
Fidelity Bank's interest income rose by 91% during that time, from N190.4 billion to N363.9 billion, with N286 billion of that amount coming from interest paid on customer advances and loans.
Additionally, the bank's interest expenditure increased by 1% to N146.8 billion from N82 billion, mostly due to a 51% increase in term deposit interest and a 153% increase in interest debt issued and other borrowed funds.
Other operating Expenses (OPEX) increased by 100.7% to N128.5 billion from N64 billion, as the cost of doing business in Nigeria rises as a result of disruptions in the energy supply and rising inflation.
On the other hand, an 844% decrease in net foreign exchange profits, which went from N32.1 billion to N3.4 billion, caused other operating income to drop from N33 billion to N4.5 billion.
The bank's primary business operations are profitable, according to NGX data, as seen by the net cash flow from operating activities, which increased to N1.01 trillion in H1 from N269 billion in the similar period of 2023.
During the quarter, its net cash flow from investing activities was negative N617.2 billion, down from a negative N102 billion. The financial activities' net cash flow increased from N9.1 billion to N13.7 billion.
For that reason, at the same period last year, cash and cash equivalents were worth N490 billion, but by H1 they were worth N801.7 billion.
From N193.73, the bank's basic earnings per share increased to N499.48.
Fidelity Bank opens public offer
Legit.ng reported that Fidelity Bank Plc today, June 20, 2024 opened an application for its N127.2 billion combined rights and public offer.
This is the bank's first capital raising initiative under the banking recapitalisation exercise mandated by the Central Bank of Nigeria (CBN).
Legit.ng had reported that the apex bank on March 28, 2024, in a circular, directed commercial banks with international authorisation to increase their capital base to N500 billion and national banks to N200bn.
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Source: Legit.ng
