Fidelity Bank grows half year after-tax profit to  N159bn

Fidelity Bank, a tier-two bank in Nigeria, has reported 159 per cent in its after-tax profit in the first six months of 2024. According to the bank’s financial statement published on the Nigerian Exchange Group, the bank’s after-tax profit rose to N159.8 billion in H1, up from N61.9 billion in the same period of last year.

The bank reported a  107 per cent jump in gross earnings to N512.8 billion from N247.1 billion. This feat was achieved by the apex bank assets repricing and high interest rate environment as a result of monetary policy rate hikes.

The Central Bank of Nigeria (CBN) raised the interest rate from 18.75 per cent to 27.25 per cent between July 2023 and September 2024 to rein in inflation and stabilise the naira. This has led to higher interest incomes for banks.

During the period, Fidelity Bank’s interest income increased by 91 per cent to N363.9  billion from N190.4 billion, with interests earned on loans and advances to customers accounting for N286 billion of the total.

The bank’s interest expense also grew by per cent to N146.8 billion from N82 billion, on the back of a 51 per cent increase in interest from term deposit and a 153 per cent increase in interest debts issued and other borrowed funds.

As the cost of doing business in Nigeria increases due to energy supply disruptions and rising inflation, other operating expenses (OPEX) grew by  100.7 per cent to N128.5 billion from N64 billion.

Conversely, other operating income fell to N4.5 billion from N33 billion as a result of a 844 per cent decline in net foreign exchange gains amounting to N3.4 billion from N32.1 billion.

Data from the NGX reveals that the bank’s business core activities are generating cash, as net cash flow from operating activities amounted to N1.01 trillion in H1, from N269 billion in the corresponding period of 2023.

Its net cash flow from investing activities for the period amounted to a negative N617.2 billion from a negative of N102 billion. Net cash flow from financing activities to N13.7 billion from N9.1 billion.

Consequently, cash and cash equivalents for the period surged to N801.7 billion in H1 from N490 billion in the corresponding period of last year.

The bank’s basic earnings per share rose to N499.48 from N193.73.