Fidelity Bank to pay N4.6b to shareholders

Shareholders of Fidelity Bank Plc will receive total dividend payout of N4.6 billion for the 2015 business year, according to a dividend recommendation filed by the board of directors of the commercial bank.

A breakdown of the dividend recommendation indicated that shareholders will receive a dividend per share of 16 kobo, implying a dividend yield of about 12 per cent at the closing price on the Nigerian Stock Exchange on Thursday. Fidelity Bank’s share price rose by 1.52 per cent on Thursday to N1.34 per share.

Audited report and accounts of Fidelity Bank for the year ended December 31, 2015 showed mixed performance with marginal growth in the top-line and similar decline in profit. Gross earnings rose from N136.09 billion in 2014 to N146.89 billion in 2015. Profit before tax however dropped from N15.52 billion to N14.02 billion. Profit after tax was almost flat at N13.9 billion in 2015 as against N13.8 billion in 2014. Earnings per share nearly remained unchanged at 48 kobo per share. Total assets rose to N1.23 trillion in 2015 as against N1.19 trillion in 2014. Total equity increased by 6.0 per cent to N183.5 billion from N173.1 billion.

Chief executive officer, Fidelity Bank Plc, Nnamdi Okonkwo said the 2015 full-year performance reflected the management’s medium term strategy despite the challenging business environment during the year.

He explained that the bank improved the earning capacity of its balance sheet even in the face of decline in fee income precipitated by a N10 billion reduction in its foreign exchange income.

According to him, the bank continued to increase yields on earning assets faster than the growth in funding costs which improved its net interest margin (NIM) to 6.9 per cent in 2015. This is indicative of the bank’s continual focus on balance sheet optimisation, rebalancing of its loan portfolio in consonance with its medium term strategy and increased growth in retail deposit base.

He explained that the decline in pre-tax profit was due largely to two critical factors including the 17.1 per cent increase in total expenses due to strategic investments and cost incurred in 2015 to position the business for further growth in line with our aspirations and the increase in impairments due to a more prudent approach adopted with respect to a special regulatory provision which was charged directly to the profit and loss accounts.

Read also: Foreign exchange reserves rise to $27.87bn in March -CBN

He however pointed out that the bank’s cost of risk remained within its guidance of 1.0 per cent despite a 6.7 per cent growth in the loan book and weaker macro-economic indices during the year.

He noted that while total expenses rose by 17.1 per cent to N64.1 billion from N54.8 billion in 2014, deposits fell to N769.6 billion from N820.0 billion representing a 6.1 percent decline, which was due to the implementation of the Treasury Single Account (TSA).

He said that the disciplined execution of the bank’s retail strategy continued to deliver strong results as savings deposits grew by 22 per cent in 2015.

“Our non-performing loan ratio remained constant at 4.4 per cent while our regulatory ratios remained well above the set thresholds, our capital adequacy ratio at 19 per cent gives us ample leverage to take advantage of emerging business opportunities”, Okonkwo stated.

He added that the bank would also adopt proactive risk management strategies, increase customer adoption and migration to its digital platforms and grow its retail banking market share in the new business year.

 

 

 

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