Fidelity Bank: Paving the Path to Prosperity Through Capital Infusion

Nume Ekeghe writes on Fidelity Bank’s recent capital raising initiative alongside its impressive half-year financial performance and other indicators that reaffirm the bank’s effective leadership and commitment to achieving prosperity

In a significant stride towards fortifying its position in the Nigerian banking sector, Fidelity Bank Plc has embarked on a transformative journey with its recently approved Capital Raising Exercise. This endeavor, approved by the bank’s shareholders, marks a pivotal moment in the institution’s history, as it seeks to leverage this infusion of capital to accelerate growth and secure a brighter future.

Remarkable H1 2023 Performance

The Capital Raising Exercise, endorsed unanimously by Fidelity Bank’s shareholders, comprises a Public Offer for up to 10 billion Ordinary Shares and a Rights Issue of up to 3.2 billion Ordinary Shares. This bold move demonstrates the bank’s unwavering commitment to bolster its financial strength and capitalize on emerging opportunities in the ever-evolving financial landscape.

The extraordinary decision was made at an Extra-Ordinary General Meeting (EGM) convened virtually on August 11, 2023. The meeting garnered participation from distinguished regulatory bodies, including the Central Bank of Nigeria, Nigeria Exchange Group, and the Securities and Exchange Commission, underscoring the significance of this capital-raising initiative.

Vision for Growth and Resilience

Mustafa Chike-Obi, Chairman of Fidelity Bank Plc, addressed shareholders with confidence, emphasizing the bank’s robust growth trajectory and its aspirations for enhanced profitability, domestic and international expansion, and the reinforcement of its digital capabilities.

“In terms of our financial performance, we are beginning to see the result of uncompromising commitment to the disciplined execution of our strategy,” Chike-Obi proudly stated.

He highlighted the bank’s remarkable achievement in 2022, where it surpassed the N50 billion mark in Pre-Tax Profits for the first time in its 35-year history.

Impressive Financial Indicators

A review of the results published on the Nigerian Exchange Group (NGX) showed a positive performance across all financial indices, reaffirming the Bank’s position as one of the fastest-growing and well-managed financial institutions in Nigeria.

Gross earnings for the period grew by 59.6 per cent to N247.1 billion from N154.8 billion reported in June 2022. Profit After Tax stood at N61.9 billion, representing a growth of 166.0 percent over N23.3 billion recorded in the corresponding period. This translates to an earning per Share of 194 kobo.

The Bank’s Net Loans and advances grew by 25.1 per cent from N2.1 trillion recorded as of December 2022 to N2.6 trillion in June 2023, with corresponding growth in Customer Deposits, which increased by 23.2 percent to N3.2 trillion from N2.6 trillion in December 2022.

Strong Balance Sheet and Risk Management

Furthermore, the bank’s balance sheet remained resilient, with Total Assets growing by 27.4 percent from N3.9 trillion in December 2022 to N5.1 trillion in June 2023. The Bank’s non-performing loans remained low and within regulatory thresholds at 3.24 percent, with adequate coverage of 111 per cent. This reflects the bank’s prudent risk management practices.

Return on Equity (ROE) and Return on Assets (ROA) closed at impressive levels of 34.9 percent and 2.8 percent, respectively, showcasing the bank’s ability to generate substantial returns for its shareholders and efficiently utilize its assets.

Shareholder Confidence and Dividend Declaration

In recognition of its stellar performance during H1 2023, the bank’s board approved an interim dividend of N0.25 per share. This marks the second consecutive year that Fidelity Bank is paying interim dividends, underscoring its capacity to provide shareholders with consistent and sustainable value.

The MD/CEO of Fidelity Bank, Nneka Onyeali-Ikpe, expressed her satisfaction with the bank’s remarkable performance, stating, “Our performance during the first half of the year reflects the resilience of our bank and the fundamental strength of our business to deliver long-term sustainable value at a time that has been characterized by global economic headwinds.”

She also reaffirmed the bank’s commitment to its core mission of empowering individuals, businesses, and economies.

Trail of Success

Fidelity Bank’s outstanding H1 2023 results add to a series of recent achievements, including its reclassification from a small-price stock to a medium-price stock by the NGX in July 2023, based on consistent impressive performance. Additionally, the bank recently emerged as the company with the highest earnings per share on the NGX for the second consecutive year.

Vision for the Future

To maintain this sterling performance, the bank’s shareholders, at an Extra-Ordinary General Meeting held on August 11, 2023, unanimously approved a capital raising exercise via a Public Offer and Rights Issue. This move is a testament to Fidelity Bank’s commitment to sustained growth and its dedication to fulfilling its promises to customers and shareholders.

Nneka Onyeali-Ikpe concluded, “We will continue to monitor and proactively manage the evolving risks in the economy while ensuring our commitments to our customers and shareholders are fulfilled. The interim dividend of 25 kobo per share, a 150 percent increase compared to the 10 kobo interim dividend in 2022 FY, attests to the value we place on the unwavering support from our shareholders.”

Fidelity Bank’s impressive performance in H1 2023 reflects not only its financial strength but also its dedication to delivering value to its stakeholders. The bank stands as a beacon of resilience and a harbinger of growth in the Nigerian banking sector.