Fidelity Bank declares N110.3 billion gross earnings in nine months
The unaudited financial statement also stated that Profit Before Tax (PBT) decreased by 28.7 per cent to N9.8 billion from N13.8 billion in the corresponding period.
According to the bank, it grew deposit base by 3.4 per cent to N795.6 billion from N769.6 billion in 2015, with the devaluation of the Naira accounting for N53.6 billion of its deposit growth.
The Managing Director/Chief Executive Officer of the bank, Nnamdi Okonkwo, pointed out that the performance was indeed reflective of the recessionary environment characterised by lower government revenues, rising inflation, lower consumer disposable income, significantly tougher operating environment in all sectors and the impact of headwinds on asset quality and foreign trade transactions.
“We continued with the disciplined execution of our medium term strategy and recorded decent growth on some key operational metrics while moderating the impact of the headwinds above on other financial indices,” he said.
Okonkwo noted that PBT declined largely due to “a 102 per cent year-on-year growth in impairment charge of N4 billion, driven significantly by increased provisions.
The lender in the second and third quarters of 2016 made N4.1 billion and N3.2 billion respectively, due to the impact of the devaluation of the local currency on its trade finance portfolio and some critical sectors affected by the weaker macroeconomic indices.
He also said a 95.7 percent year-on-year decline of N1.3 billion in dividend income on equity investments, as well as 8.9 per cent year-on-year growth in operating expense were responsible for the decline in profit.
According to him, growth in operating expenses was driven essentially by increased technology and advertisement costs. Quarter-on-Quarter basis, he stated that gross earnings grew by 10.7 per cent to N39.9 billion, driven by a 22.6 per cent growth in Interest Income.
“The Interest Income growth was largely driven by 25.6 percent (N5.4bn) growth in Interest Income on Loans while Interest Income on Liquid Assets increased by 13.5 percent (N0.9 billion) for the quarter”, Okonkwo said.
He however, noted that the bank has crossed the half a million customer base on its flagship Instant banking product: *770# (Mobile Phone USSD Technology) and would be launching payment services to merchants using our Instant Banking product (*770#) in Q4, 2016.
“We have continued to take a very prudent view of the impact of the currency devaluation, tougher operating environment and declining consumer disposable income on selected sectors of our loan portfolio.
“NPL ratio increased to 4.5 percent largely due the macro-economic weakness, which has negatively impacted on our asset quality metrics.
“We are still focused on keeping our NPL ratio below five percent in this very challenging operating environment. Our other regulatory ratios (Liquidity Ratio / CAR) remained above the set thresholds, though Capital Adequacy Ratio improved from 16.4 percent in Q2 2016 to 16.8 percent in Q3, 2016, we expect CAR to revert to 18 percent+ once we adjust for the excess non-distributable reserves (N23bn) in our 2016FY audited accounts,” he added.