Fidelity Bank (FIDELITYBK) Q2 2024 earnings summary

Executive summary

• Achieved strong H1 2024 growth with gross earnings up 108% to ₦512.9bn and profit before tax rising 163.1% to ₦200.9bn, driven by improved NIM, robust deposit mobilization, and increased non-interest revenue.

• Successfully completed the first phase of a capital raise, with 2.1x oversubscription, raising ₦265bn, and launched further public offers and rights issues to support growth and digital expansion.

• Maintained a dividend payout policy of 25%-40% of profit after tax, declaring an interim dividend of ₦0.85 per share.

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

• Focused on technology-driven innovation, regional expansion, and strengthening asset quality.

Financial highlights

• Total deposits grew 34% year-to-date to ₦5.4tn, with low-cost funds accounting for 93% of total deposits, supporting a cost of funds at 5%.

• Net interest income surged 202.7% year-over-year to ₦326.4bn, with NIM improving from 8.1% to 13.4%.

• Cost-to-income ratio improved to 40.3% (down from 50.4%), reflecting strong revenue growth despite higher operating expenses.

• Total assets increased to ₦7.93tn, up 27.2% year-to-date.

• Net loans and advances rose 21.3% year-to-date to ₦3.75tn, with FCY loans now 52.8% of the loan book.

Outlook and guidance

• Expect continued strong growth, leveraging technology, innovation, and regional expansion in 2-5 African countries over the next 3-5 years.

• Loan and deposit growth are on track to exceed full-year targets, with improved asset quality anticipated in power and oil & gas sectors.

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

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

• Management expects continued improvement in asset quality and earnings, with focus on risk management and operational efficiency.