Fidelity Bank Grows Profit by 65.6% to N9b, H12017, Declares No Interim Dividend

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Fidelity Bank has posted 65.59 percent Profit after Tax (PAF), for its first half of the year 2017 and improved by N3.579billion from N65.457billion in the corresponding period of 2016 to N9.036billion.

The financial statement released on Tuesday said, N3.65billion came from the retail banking, while the corporate banking fetched N2.098billion and investment banking N588million.

Also, the net profit represented earnings per share of 31 kobo, as against the previous 19 kobo; while net profit margin stood at a mere 11.9% for banks within its ranks; compared to 8.72% in 2016. The bank however, did not give any dividend for the period.

The financial results further showed that Gross earnings rose by N15.562bn or 22.14% from N70.259bn to N85.821bn for the period under review and profit before income tax stood at N10.22 billion as at June 30, 2017, in contrast to N6.13 billion achieved 12 months ago.

However, the results showed that no dividend was proposed by the Board of Directors of the lender in respect of the interim period ending June 30, 2017.

According to the bank, in the period under review, data from its Register of Members showed that no single shareholder held more than 5 percent of the issued share capital of Fidelity Bank.

Fidelity Bank, which boasts of 3,358 employees, made up of 57 percent male and 43 percent female said its gross earnings rose to N85.82 billion from N70.26 billion in 2016, while the net interest income increased to N34.70 billion from N31.23 billion on June 30, 2016.

Furthermore, the net interest income after impairment charge stood at N29.89 billion in the period under review compared with N26.43 billion a year ago.

Also, the net cash flow used in operating activities closed at N7.67 billion as at June 30, 2017, in contrast to the N24.90 billion loss recorded 12 months ago, while the net cash flows provided by investing activities finished at N12.91 loss against N24.72 billion in the first half of last year.

According to the financial statements, loans and advances to customers stood at N51.05 billion versus N39.44 billion a year ago, while net foreign exchange gains closed at N2.55 billion against N963 million 12 months ago.

The lender noted that as at reporting date, it had several claims against it by parties seeking legal compensation in the sum of N3.92 billion as at June 30, 2017 versus N3.96 billion.

“Based on the estimates of the bank’s legal team and the case facts, the bank estimates a potential loss of N544.72 million (Dec 31, 2016: N544.72 million) upon conclusion of the cases.

“On the other hand, the bank has outstanding claims against various individuals in the sum of N2.75 billion (Dec 31, 2016: N7.63 billion) that are yet to be settled,” the report said.

Profit before tax therefore rose to N10.219bn from N6.131billion; while income tax expense almost doubled to N1.183billon, as against prior half-year’s N6.131billion; following which net profit for the period improved by N4.088billion or 66.67% from N5.457billion in the corresponding period of 2016 to N9.036billion, N6.35billion of which came from the retail banking; while corporate banking fetched N2.098billion; and investment banking, N588million. Also, the net profit represented earnings per share of 31 kobo, as against the previous 19 kobo; while net profit margin stood at a mere 11.9% for banks within its ranks; compared to 8.72% in 2016.

Total assets for the period grew to N1.308trillion from N1.298trillion, with customer loans and advances crawling to N720.163billion from N718.401billion; just as total liabilities increased slightly from N1.112trillion to N1.116trillion, with deposits from customers declining from N792.971billion to N761.069billion; even as shareholders’ funds grew to N192.339billion from N185.402billion

In addition, Fidelity Bank disclosed that it has a $300 million Eurobond maturing in May 2018, adding that management has disclosed that it will issue a statement by September 30, 2017 stating which of the following options it will adopt for the Eurobond; redemption of the bonds, refinancing of the bond or issuing a new bond.

However in the interim the bank has set-up a sinking fund towards the repayment of the Eurobond if it decides to redeem the existing bonds.

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