Fidelity Bank Plc has recorded a a pre-tax profit of N4.0 billion for the first quarter ended March 31, 2016, a 14.6 percent decrease to N4.0bn from N4.7bn. It’s gross earnings decreased by 5.5 percent to N34.4bn from N36.4bn in Q1 2015.
However, the bank had its net interest income increased by 30.0 percent to N16.1bn from N12.4bn, just as net operating income too increased by 6.2 percent to N20.8bn from N19.6bn in Q1 2015.
Fidelity Bank’s total expenses increased by 15.7 percent to N16.0bn from N13.9bn in Q1 2015, net loans increased by 2.1 percent to N590.1bn from N578.2bn in 2015 FY.
Deposits increased by 1.9 percent to N784.5bn from N769.6bn, total equity increased by 1.3 percent to N187.0bn from N183.5bn and total assets increased by 4.0 percent to N1,284.2bn from N1,231.7bn in 2015 FY.
The bank said in a statement admitted that its financial performance for the quarter is reflective of the continued slowdown in business activities; due to lower government revenues arising from depressed oil prices, lower interest rate regime and weaker macro-economic environment.
“We continued to improve the earnings capacity of our balance sheet (fund based income) despite the decline in fee income. Though gross earnings declined by 5.5% (due to a N4.2 billion drop in our foreign exchange income), net interest income increased by 30.0%, e-banking income by 216% and net operating income by 6.2% respectively.
“In line with our focus on balance sheet optimization, we ensured that the reduction in funding costs outpaced the decline on yields on earning assets. This improved our NIM to 7.3 percent from 6.9 percent in the 2015FY.
“Though operating expenses increased by 15.7 percent YOY, expense growth was flat when compared with 2015FY quarterly annualized figures and actually declined by 24.1 percent from Q4 2015.”
The bank said that its cost of risk remained within “our guidance of 1.0 percent as we saw a decline of our risk asset portfolio in most sectors due to the weaker macro-economic indices, overall loan growth of 2.1 percent was basically driven by public sector on-lending facilities.
“Our NPL ratio declined to 4.3 percent largely due to the growth in the loan book while our regulatory ratios remained well above the set thresholds, our capital adequacy ratio at 19.3 percent gives us ample leverage to take advantage of emerging business opportunities.
“Total deposits increased by 1.9 percent and the disciplined execution of our retail strategy continued to deliver strong results as savings deposits grew by 13.4 percent in the quarter under review.”
The bank emphasised that its key objectives for the 2016FY remains; redesigning its systems and processes to enhance service delivery, cost optimization initiatives to reduce expenses by five percent, proactive risk management, increased customer adoption/migration to our digital platforms and increasing our retail banking market share.
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