At a time when some other competitors are declaring lower numbers, the Nneka Onyeali-Ikpe-led the management of Fidelity Bank Plc, on Tuesday gave shareholders reason to hope for juicier returns on their investment, judging from its 2021 first-quarter performance scorecard (her very first in the saddle), while praying that the momentum is sustained and that all things remain equal.
The result showed, among others, faster growth of 63.67% in net profit, when compared to the marginal N3.963bn or 7.74% rise in gross earnings, even when interest revenue, the lifeblood of any bank, dropped. Highlights of the scorecard showed that appreciable growth was recorded in “other operating income,” and “other interest and similar income” for the period, as a result of which the bank successfully delivered Earnings Per Share of 33 kobo, up from 20 kobo in the corresponding period of last year.
Gross earnings for the period stood at N55.122bn, up from N51.159bn in the prior first quarter, with interest revenue calculated using the effective interest method, dropped from N42.297bn in the 2020Q1, to N39.149bn; other interest and similar income improved to N3.913bn from N1.629bn. Interest expense calculated using the effective interest method dropped from N19.326bn to N14.265bn, with interest on term deposits dropping from N9.92bn to N5.769bn; debts issued and other borrowed funds cost N6.288bn, from N5.189bn; while interest on saving deposits dropped to N1.007bn from N1.824bn. Cost of interbank takings dropped significantly from N1.464bn to N296m. This resulted in a net interest income of N28.797bn, up from N24.6bn in the preceding first quarter.
The bank reported credit loss of N1.266bn, an improvement from the N2.103bn of last Q1; leaving net interest income after credit loss of N27.531bn, compared to N22.497bn.
Fee and commission income rose from N5.571bn to N6.005bn, lifted by income from automated teller machine charges, which rose from N801m to N1.023bn; while accounts maintenance charge increased to N899m from N735m; among others. Fee and commission expense increased to N1.831bn using the effective interest method, a drop from N42.297bn in the 2020Q1, to N39.149bn; other interest and similar income improved to N3.913bn from N1.629bn. This was buoyed by the N5.386bn net foreign exchange gains, which rose from N1.449bn. Interest expense calculated using the effective interest method dropped from N19.326bn to N14.265bn; resulting in a net interest income of N28.797bn, up from N24.6bn in the preceding first quarter.
The bank reported credit loss of N1.266bn, an improvement from the N2.103bn of last Q1; leaving net interest income after credit loss of N27.531bn, compared to N22.497bn.
Fee and commission income rose from N5.571bn to N6.005bn; while fee and commission expense increased to N1.831bn from N1.556bn; resulting in net fee and commission income of N4.174bn, as against the previous N4.015bn.
Other operating income stood at N6.055bn, rising from N1.662bn, but the impact of this was watered down by the net loss from financial assets at fair value of N4.663bn, compared to the previous N38m gain. Net operating income, therefore, rose from N28.212bn to N33.097bn.
Personnel expenses for the period dropped to N5.494bn from N6.398bn; depreciation and amortization rose to N1.686bn from N1.415bn; just as other operating expenses increased from N13.815bn to N15.783bn, the lion’s share of which was the N6.7bn banking sector resolution cost paid to the Asset Management Corporation of Nigeria (AMCON), up from N2.992bn. Marketing, communication & entertainment expenses dropped to N2.659bn to N1.548bn; followed by the N1.908bn deposit insurance premium paid to the Nigeria Deposit Insurance Corporation (NDIC), up from N1.293bn; while outsourced cost rose from N1.123bn to N1.292bn. These left total operating expenses for the period at N22.963bn, up from N21.628bn in the preceding Q1.
Profit before income tax expense, therefore improved to N10.134bn, up from N6.583bn; while income tax expense dropped from N724m to N543m, following which net profit rose by N3.731bn from N5.859bn to N9.59bn.
On the balance sheet, total assets improved by 28.77% from N2.246t6r in March 2020, to N2.893tr; boosted by customer loans and advances, which rose from N1.165tr to N1.426tr. Total liabilities appreciated from N2.004tr to N2.628tr, representing a 31.15% rise; lifted by customer deposits of N1.751tr, which improved from N1.352tr. Shareholders’ funds for the period, therefore improved from N242.384bn to N264.424bn.
