Fidelity Bank (FIDELITYBK) Q4 2024 earnings summary

Executive summary

• Focused on optimizing the balance sheet, expanding the earning base, and enhancing net interest margin, with a strong emphasis on low-cost deposit mobilization and non-interest revenue growth.

• Achieved record gross earnings of N1,043.4bn, up 87.7% year-over-year, with PBT rising 210% to N385.2bn and ROAE at 41.7%.

• Successfully integrated the UK subsidiary, doubling its assets and expanding customer reach.

• Maintained a resilient balance sheet and prioritized strong corporate governance, risk management, and shareholder value through consistent dividend payments.

• Customer deposits increased 47.9% to N5,937.1bn, driven by double-digit growth across all deposit types.

Financial highlights

• Net interest margin improved to 12% from 8.1% year-over-year, driven by higher yields and effective deposit mobilization.

• Cost-to-income ratio improved to 42% (down from 50%), as income growth outpaced operating expenses.

• Total assets increased by NGN 2.6 trillion, with 83% of growth invested in earning assets.

• Net loans and advances rose 41.9% to NGN 4.44 trillion, with real growth at 10.5% and the rest due to naira devaluation.

• Non-interest revenue saw double-digit growth across most commission lines, though non-interest income (excluding FX gains) declined 3.6%.

Outlook and guidance

• Expectation of moderate interest rates in 2025, with continued elevated rates due to global and local economic pressures.

• 2025 targets include PBT of N555bn, loan growth of 10–15%, deposit growth of 15–20%, and ROAE of 35–40%.

• Guidance for cost of risk at a maximum of 2%, with NPL ratio expected to remain well below the 5% regulatory threshold.

• Dividend payout ratio to be sustained between 25% and 40% of profit after tax.

• Ongoing capital raise with a private placement phase to conclude by mid-2025 and a second recapitalization planned to boost CAR by 500–600bps.