Managing Director, Fidelity Bank Plc, Nnamdi Okonkwo, has blamed the bank’s unimpressive performance in 2013 to higher cost of deposits arising from prevailing tight monetary conditions.
Okonkwo who made the assertion at the bank’s “Facts Behind the Figures” session at the Nigerian Stock Exchange (NSE) in Lagos on Thursday, said that the Asset Management Company of Nigeria (AMCON) upward review of levy on total assets from 0.3 per cent to 0.5 per cent increased the bank’s operating expenses to N4.6 billion from N2.2 billion in 2012.
Okonkwo said that the introduction of 50 per cent Cash Reserve Ratio on public sector funds in August 2013 also contributed to the bank’s poor performance. “We sustained average monthly income reduction of N520.5 million between August and December 2013,” he said.
He also said that AMCON’s recall of N4.4 billion on previously sold loans and one-off additional provision of N1.8 billion for gratuity and pension obligations affected the bank’s performance.
The bank recorded 56.86 per cent drop in profit for the financial year ended Dec. 31, 2013. The bank’s profit for the year stood at N7.73 billion from N17.924 billion achieved in the preceding period of 2012.
Its profit before tax dropped to N9.03 billion from N21.35 billion in 2012, a decrease of 57.70 per cent.
Okonkwo, however, said that the bank would strengthen distribution capabilities and increase operating efficiency through consistent business process improvements to enhance future performance.
He said that the bank would embark on branch expansion, strategic alliances and deployment of Automated Teller Machines to ensure improved value creation to all stakeholders.
He said that the bank would deepen its participation in energy, oil and gas, telecommunications and other fast-growing sectors by leveraging enhanced balance sheet and expanded distribution network.
The managing director said that the bank would partner other reputable facilitators of Small and Medium Enterprises (SMEs) to position it as the preferred bank for SMEs.
He said that the bank, through its “back to the basics, forward to the future” strategy, was well-positioned to deliver safe growth to its shareholders.
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