Fidelity Bank Plc has recorded a strong financial performance in the first quarter of 2021, posting appreciable growth in profit for the period ended March 31, 2021.

Details of the unaudited results, released on the Nigerian Exchange (NGX) Limited, showed that its profit before tax (PBT) grew by 53.9 per cent from N6.6 billion in the corresponding period in 2020 to N10.1 billion in the period under review.

Similarly, net revenue in the period increased by 13.4 per cent from N30.3 billion in the first quarter (Q1) 2020, to N34.4 billion at the end of March 2021. The bank also recorded growth in other performance indices.

Commenting on the results, the MD/CEO of Fidelity Bank, Mrs. Nneka Onyeali-Ikpe, was quoted in a statement to have said: "We commenced the year showing impressive double-digit growth in profitability and improved performance across key efficiency indices whilst ensuring our business model continued to deliver strong positive results in line with our guidance for the 2021 financial year.

"Gross earnings increased by 7.7 per cent year-on-year to N55.1 billion on account of 66.7 per cent growth in non-interest revenue (NIR) to N12.1 billion, from N7.2 billion in Q1 2020. In absolute terms, the increase in NIR came from forex-related income, digital banking income and account maintenance charge etc, as total customers' induced transactions across all our service channels increased by 30.4 per cent year-on-year and 17.1 per cent quarter-on-quarter.

"Net interest margin remained unchanged at 6.3 per cent compared to 2020 full year as the drop in average funding cost offset the decline in average yields on earning assets."

Also, the results showed that average funding cost dropped to 2.5 per cent from 3.6 per cent in 2020 full year due to a combination of improved deposit mix and a slight moderation in average borrowing cost.

This, it stated, led to a 26.2 per cent decline in total interest expenses, which translated to 17.1 per cent increase in net interest income to N28.8 billion despite a 4.3 per cent increase in interest-bearing liabilities.

"We refinanced our seven-year N30 billion Tier II Bonds issued in 2015 at 16.48% per annum with cheaper 10-year N41.2 billion Tier II Bonds priced at 8.5% per annum, which led to a 61 basis points drop in average borrowing cost to 4.5 per cent.

"Operating expenses increased by N1.3 billion (6.2%) to N23 billion largely driven by N4.3 billion growth in regulatory charges (NDIC & AMCON charges). Excluding the increase in regulatory charges, total operating expenses would have dropped by 13.8 per cent (6.1% quarter-on-quarter) to N18.6 billion, from N21.6 billion in Q1 2020 (Q4 2020 was N19.8 billion)," she added.

Also, the bank's total deposits in the period under review increased by 3.1 per cent year-to-date to N1.751 trillion, from N1.699 trillion in the full year 2020.

This was driven by a 5.5 per cent increase in low-cost deposits.

The statement said the bank's foreign currency deposits increased by 15.7 per cent year-to-date to N46.9 billion and now accounts for 19.7 per cent of total deposits, from 17.5 per cent in full-year 2020, as it harnesses the benefits of its renewed drive in diaspora banking as well as the recent CBN naira-for-dollar incentive scheme for diaspora remittances to Nigeria.

Fidelity Bank stated that its retail banking continued to deliver impressive results as savings deposits increased by 4.1 per cent year-to-date to N441.6 billion.

"And we are on course to achieving the ninth consecutive year of double-digit growth in savings deposits.

"Savings deposits were responsible for 32.9 per cent of the absolute growth in total deposits and now accounts for 25.2 per cent of total deposits compared to 25 per cent in 2020," it added.

Its net loans and advances increased by 7.6 per cent year-to-date to N1.426 trillion, from N1.326 trillion in the full year 2020.

"However, the actual growth was 6.8 per cent while the impact of the currency adjustment (2020FY: N400.3/$ and Q1 2021: N407.6/$) accounted for a 0.8 per cent year-to-date growth in the loan book. Cost of risk came in at 0.4 per cent and the NPL ratio dropped to 3.6 per cent from 3.8 per cent in the 2020 full year.

"Other regulatory ratios remained above the required thresholds with a liquidity ratio at 33.9 per cent and capital adequacy ratio (CAR) at 18.4 per cent from 18.2 per cent in 2020 full year.

"We are committed to sustaining our growth trajectory and achieving the long-term strategic aspirations of the bank as we look forward to delivering another set of good results in the next quarter," Onyeali-Ikpe said.

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