Fidelity Bank grows assets, gross earnings in six months
The growth, amid assessed challenging environment for the banking industry, also represented a 0.5 per cent increase, while the gross earnings, put at N71.9 billion, showed 13.6 per cent rise from N63.3 billion achieved in the corresponding period of 2014.
The figures, contained in the unaudited report of the bank for the first half of 2015, ended June 30, also showed that recorded increase in net fee income by 25.9 per cent to N15.2 billion from N12.1 billion in the first half of 2014, while the operating income increased by 14.1 per cent to N42 billion from N36.8 billion in the period of 2014.
However, total expenses rose as well with the increase activities of the lender to N28.8 billion in the period under review from N25.3 billion in June 2014, representing a by 13.8 per cent rise.
The growth in operating expense by 13.8 per cent y-o-y to and 8.4 per cent q-o-q was on the back of increased staff remuneration and promotions, regulatory and advertisement costs.
Nonetheless, cost-income ratio declined to 69.2 per cent in the review period from 74.2 per cent in the 2014 financial year, as revenue growth outpaced the increase in operating cost.
Further breakdown of the report had profit before tax rise by 2.5 per cent to N9.7 billion from N9.4 billion in 2014, while profit after tax moved to N8.2 billion from N8 billion in the comparable period of 2014, representing 2.5 per cent increase.
The bank’s books also showed that net loans trended upwards by 5.8 per cent to N572.8 billion from N541.7 billion as at December 2014, along with increase in non-performing ratio, which reached 3.7 per cent, although within the bank’s guidance.
Under the review period, deposits declined by 2.9 per cent to N796.6 billion from N820 billion in December 2014.
With the private sector depositors accounting for 87 per cent of the lender’s deposits, it sterilized additional N21 billion due to the Cash Reserve Requirement’s harmonization, which impacted deposit base.
The Managing Director and Chief Executive Officer of Fidelity Bank, Nnamdi Okonkwo, while commenting on the results, pointed out that business activities in the first half of 2015 were challenged by multiplicity of issues within the operating environment.
He noted that due to heightened political risks in the first quarter, weaker government revenues arising from lower crude oil prices, a tighter monetary policy environment and currency devaluation concerns, which translated to a significantly lower Gross Domestic Product’s growth rate, economic activities were affected, including banks.
“Despite these challenges, we continued with the disciplined execution of our medium term strategy- taking into consideration the weaker macro-economic environment.
“Our profit before tax increased to N9.7 billion despite significantly increased loan provisions anchored on our conservative view of selected sectors. We are pleased with the year-on-year (y-o-y) and quarter on quarter (q-o-q) growth in our profitability, given the reduced level of business activities in the first half of 2015,” he said.
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