Fidelity Bank (FIDELITYBK) Q2 2024 earnings summary

Executive summary

• Achieved strong H1 2024 results with gross earnings up 108% to ₦512.9bn and profit before tax rising 163.1% year-over-year to ₦200.9bn, despite macroeconomic headwinds such as high inflation, FX volatility, and subsidy removal.

• Focused on expanding earning assets, optimizing net interest margin (NIM), and increasing non-interest revenue through fee-based income and digital channels.

• Successfully completed acquisition and integration of FidBank UK Limited, contributing to consolidated results and supporting international expansion.

• Maintained a robust dividend policy, paying an interim dividend of NGN 0.85 per share and reaffirming a payout range of 25%-40% of profit after tax.

• Board approved capital raise via public offer and rights issue to support growth, digital expansion, and regulatory requirements.

Financial highlights

• Total deposits grew 34% year-to-date to ₦5.38tn, with 93% in low-cost funds.

• Net interest income surged 202.7% year-over-year to ₦326.4bn, supported by higher yields and a 34.8% increase in earning assets.

• Cost-to-income ratio improved to 40.3% (down from 50.4%), despite a significant rise in operating expenses.

• Total assets increased by 27.2% year-to-date to ₦7.93tn, with 86% of growth invested in earning assets.

• Net fee income increased 31% year-over-year, with strong growth in account maintenance charges (+74%), trade income (doubled), and credit-related fees (+16%).

Outlook and guidance

• Expect continued strong performance, leveraging technology and innovation for growth, with loan and deposit growth on track to exceed full-year targets.

• No material change expected in market fundamentals for the rest of 2024; inflation and FX pressures to persist, but improvement anticipated in 2025.

• Guidance for cost of risk remains at 2% for the year, with NPL ratio stable at 3.5%.

• Targeting further regional and international expansion, including select African countries and enhanced digital capabilities.

• Capital raising initiatives underway to support future growth and regulatory requirements.