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Fidelity Bank Half-Year Net Profit Up 70.8% On Huge Decline In Impairment Charge

Directors of Fidelity Bank Plc, on Friday, submitted its audited scorecard for the half-year ended June 30, 2021, the highpoint of which was the rise in net profit by N8.0bn or 70.8%, which was boosted by a 70.6% decline in credit loss expense from N7.841bn in the 2020 first half, to N2.305bn.

The rise in profit was despite the flat gross earnings growth from N105.755bn to N112.304bn, after interest and similar income dropped marginally from N87.07bn to N85.09bn. A breakdown of the earnings showed that retail banking contributed N45.45bn, down from N38.706bn in the prior half-year; followed by investment banking’s N37.333bn, up from N34.006bn; while corporate banking followed with N29.521bn, as against N23.043bn in the corresponding period of last year.

Other interest and similar income jumped to N4.03bn from N552m in the corresponding period of last year; while interest and similar expense dropped slightly from N39.302bn to N38.824bn; leaving net interest income at N50.297bn against the preceding half-year’s N48.32bn. Net interest income after credit loss expense increased from N47.992bn to N40.479bn.

Fee and commission income grew from N9.535bn to N12.726bn, driven by Automated Teller Machine charges that fetched N2.244bn, up from N1.461bn; accounts maintenance, N1.879bn, N1.248bn; and commission on e-banking, N1.555bn, N1.107bn; just as fee and commission expense stood at N3.309bn from N2.764bn. Other operating income increased to N10.456bn from N8.598bn, lifted by net foreign exchange gains that rose from N7.443bn to N8.449bn; net gains from financial assets at fair value through profit and loss jumped from N2.956bn to N4.99bn.

Personnel expenses dropped to N11.101bn from N12.19bn; depreciation and amortization was flat at N3.485bn, compared to the previous N3.03bn; just as other operating expenses fell from N31.621bn in the 2020 half-year to N27.661bn, with banking sector resolution cost which dropped from N11.866bn to N10.403bn. Profit before tax therefore soared from N11.963bn to N20.628bn; while income tax expense soared by 100.3% from N660m to N1.322bn; with profit after tax growing from N11.303bn to N19.306bn; the lion’s share of which was the N11.661bn from retail banking, compared to N6.642bn in 2020 half-year; followed by the N5.135bn profit from corporate banking, compared to last year’s N3.387bn; and ahead of the N2.512bn contributed by the investment banking segment, compared to N1.274bn in the preceding half-year. The net profit translated to earnings per share of 67 kobo, compared to the previous 39 kobo each.

The bank also recorded growth in its balance sheet, with total assets growing to N3.11tr, up from N2.758tr in December last year; of which loans and advances grew to N1.535tr from N1.326tr. Total liabilities rose from N2.484tr to N2.837tr, with customer deposits of N1.98tr, an increase from N1.699tr. Shareholders’ funds stayed stagnant at N273.372bn, same as it was last December.

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