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Fidelity Bank eyes N50bn bond to refinance existing debt

Nigerian mid-tier lender, Fidelity Bank Plc plans to issue up to N50 billion ($131.3 million) in local bonds by the fourth quarter (Q4) of 2020 to refinance existing debt amid falling yields.

The bank’s Chief Operations and Information Officer, Gbolahan Joshua told an analyst call that the new issue will be made to redeem an existing N30 billion bond issued at 16.48percent.
Bond yields have declined on the local debt market after an oil price crash triggered by the Covid-19 pandemic caused foreign investors to dump naira assets, leaving money markets awash with liquidity.

Debt market yields have dropped from a high of 18percent three years ago. Yields on the one-year Treasury bill are quoted under 5percent.

Nigerian banks need more capital to meet demands from customers as businesses ponder negative impact of Covid-19 pandemic, decline in crude oil prices and naira devaluation.

Despite the economic challenges occasioned by the COVID-19 pandemic, Fidelity Bank has sustained the financial performance trajectory of recent years, with another set of impressive financial results.

Details of the Audited Half Year results ending June 30, 2020 for the top Nigerian lender, released on the Nigerian Stock Exchange (NSE) show strong growth in profits and other indices.

The bank recorded a surge in Profit Before Tax of N12billion from N9.8billion in 2019, which translated to a 22percent growth. Net profits for Fidelity Bank grew by 33percent from N8.5billion to N11.3billion in the reporting period. In other indices Total Assets rose by 13.7percent from N2.1trillion in 2019 to N2.4trillion this year whilst Total Deposits rose by 14.8percent from N1.2trillion to N1.4trillion during the same period.

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