Fidelity Bank H1 performance reflects lender’s business model ~CEO
Nigeria’s Fidelity Bank Plc first half of 2020 financial performance was a reflection of the resilience of the bank’s business model, the lender chief executive, Nnamdi Okonkwo said on Sunday.
“Due to the global and domestic headwinds witnessed in H1 2020, we proactively increased our cost of risk as the impact of the pandemic slowed down economic activities whilst adapting our business model to the new risks and opportunities of the new normal.” Okonkwo said.
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He said Fidelity Bank, re-stated its H1 2019 figures from N15.1 billion to N9.8 billion to reflect the impact of IFRIC 21- Levies, which was adopted for the first time on the H1 2020 financials.
“The key impact of IFRIC 21 was that our 2020FY AMCON Cost was recognized 100 percent in our H1 2020 Accounts rather than been amortized over 12 months as was done previously on our financials,” the bank chief executive said.
He further revealed that, without implementing IFRIC 21, profit for the period would have been N17.9 billion compared to the N15.1bn reported in H1 2019.
In a statement, the bank said it has been implementing a digital-led retail strategy and digital banking gained further traction during the period with 87.3 percent of the bank’s customers now transacting on digital platforms.
The figures are up from 82.0 percent in 2019FY while 51.2 percent of the bank’s customers are now enrolled on the bank’s mobile/internet banking products.
“Though digital banking income dropped by 29.1 percent due to the downward fee revisions for electronic transactions in line with the new bankers’ tariff, we have continued to receive positive reviews on our digital channels. IVY, the bank’s chat box is rated as the clear leader, among virtual assistants in the industry, just as our flagship instant banking product (*770#) was also rated in the top tier category in the recently released 2020 KPMG Digital Channels Scorecard” he explained.
Retail Banking in Fidelity Bank has continued to also deliver impressive results. Savings Deposits in H1 2020 increased by 32.2 percent to N363.9 billion with the bank on course to achieving the 7th consecutive year of double-digit growth in savings. Savings Deposits accounted for 49.1% of the total growth in customer deposits and now represents 25.9 percent of total deposits compared to 22.5 percent in 2019FY.
In reflection of the bank’s early conservative assessment of the sectors that were affected by the COVID-19 pandemic, the bank’s Non-Performing Loans (NPL) ratio increased to 4.8 percent from 3.3 percent in 2019FY.
Regulatory Ratios however remained above the required thresholds with Capital Adequacy Ratio increasing to 18.8 percent from 18.3 percent due to the capitalization of H1 2020 Audited Profits while Liquidity Ratio stood at 32.1 percent.
Buoyed by the H1 performance, the bank is optimistic about the remaining part of the year. “We believe the new phase of normalcy will unveil some growth opportunities. We will continue to monitor and pro-actively manage any evolving risks as the Nigerian economy gradually reopens and economic activities pick-up in key sectors” Okonkwo stated.