…as analysts maintain ‘buy’ rating for stock
Just recently, Fidelity Bank Plc published its audited financial results for the first half (H1) ended June 30, 2023.
A review of the results published on Friday September 1, shows positive performance across all financial indices, reaffirming the bank’s position as one of the fastest growing and well-managed financial institutions in Nigeria.
The half year financial scorecard
Fidelity Bank recorded remarkable 204.4percent growth in Profit Before Tax (PBT) for the first half of 2023 to N76.3billion, the financial scorecard released to investors at the Nigerian Exchange Limited (NGX) shows.
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The bank’s gross earnings for the period grew by 59.6percent to N247.1billion from N154.8billion reported in June 2022. Profit After Tax (PAT) stood high at N61.9billion, representing a growth of 166percent over N23.3billion recorded in the corresponding period. This translates to an Earning per Share (EPS) of 194kobo.
Fidelity Bank’s net loans and advances grew by 25.1percent, from N2.1trillion recorded as of December 2022 to N2.6trillion in June 2023 with corresponding growth in customer deposits which increased by 23.2percent to N3.2trillion from N2.6trillion recorded in December 2022.
The bank’s balance sheet remained strong with a 27.4percent growth in total assets from N3.9trillion in December 2022 to N5.1trillion. Also, the bank’s non-performing loans remained low and within regulatory threshold at 3.24percent with adequate coverage of 111percent. Return on Equity (ROE) and Return on Assets (ROA) closed at 34.9percent and 2.8percent respectively.
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Another half year of interim dividend
On the back of the strong half year (H1) 2023 performance, the board of the bank approved an interim dividend of 25kobo per share making it the second consecutive year the bank would be paying interim dividends and another demonstration of its capacity to provide shareholders with sustainable value.
The proposed interim dividend of 25kobo per share amounts to N8billion payable from the retained earnings as at June 30, 2023. This will be presented for ratification by shareholders at the next Annual General Meeting.
The interim dividend will be paid to shareholders of the bank whose names appear in the register of members at the close of business on September 15, subject to appropriate withholding tax. The register of shareholders will be closed on September 18, while the interim dividend will be paid to shareholders on September 22.
The interim dividend of 25kobo per share, a 150percent increase compared to 10kobo in 2022FY, attests to the value Fidelity Bank places on the unwavering support from its shareholders. This is even as the bank commits to continue monitoring and pro-actively managing the evolving risks in the economy while ensuring its commitments to customers and shareholders are fulfilled.
CEO speaks on the half year results
Nneka Onyeali-Ikpe, MD/CEO, Fidelity Bank Plc said, “We are pleased to report on another period of quality growth across all financial and non-financial indices. Our performance during the first half of the year reflects the resilience of our bank and the fundamental strength of our business to deliver long-term sustainable value at a time that has been characterised by global economic headwinds. As a bank, we remain committed to our goal of helping individuals to grow, inspiring businesses to thrive and empowering economies to prosper”.
She noted that, “The Bank’s impressive H1 2023 results comes to join a string of recent achievements by Fidelity Bank. It would be recalled that the Bank’s stock was reclassified from small-price stock to medium-price stock by the NGX in July 2023 on the back of a consistent impressive performance.
“Similarly, the bank recently emerged the company with the highest earnings per share on the NGX based on half year financial figures for the second year running. To sustain this sterling performance, the bank’s shareholders, at an Extra-Ordinary General Meeting held on August 11, 2023, unanimously approved a capital raising exercise via a Public Offer and Rights Issue”.
“We will continue to monitor and pro-actively manage the evolving risks in the economy while ensuring our commitments to our customers and shareholders are fulfilled. The interim dividend of 25kobo per share, a 150percent increase compared to the 10kobo interim dividend in 2022FY, attests to the value we place on the unwavering support from our shareholders”, stated Onyeali-Ikpe.
Stock nears 52-week high…gets “buy” ratings from analysts
Fidelity Bank has 32.012billion shares outstanding. The share price at N8.75 per share as at Friday, September 8 represented an increase by 101.1percent year-to-date (YtD). Fidelity Bank stock price had reached a 52-week high of N9.82 as against a 52-week low of N3.3.
Futureview research analysts in their September 11 stock recommendation rated Fidelity Bank a “buy” saying that their target price (TP) for the stock is N9.60. Futureview analysts “buy” rating for Fidelity Bank stock is based on their expectation that over the next 12 months, the stock will return at least 10percent above the current market price.
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Likewise, Meristem research analysts who set a target share price of N9.25 for Fidelity Bank urged investors to “hold” the stock.
In the same vein, United Capital research analysts in their stock recommendations for the week advised investors to buy Fidelity Bank shares saying that their year-end target price for the stock is N10.5. Vetiva research analysts in their September 11 note rated Fidelity Bank stock a “buy”. According to Vetiva, their target price for Fidelity Bank is N11.
The bank and corporate governance
Fidelity Bank is a full-fledged commercial bank operating in Nigeria with over 8 million customers serviced across its 250 business offices and digital banking channels.
The principal activity of the bank continues to be the provision of banking and other financial services to corporate and individual customers from its headquarters in Lagos and 250 business offices. These services include retail banking, granting of loans and advances, equipment leasing, collection of deposits and money market activities.
The bank was recently recognised as the Best SME Bank Nigeria at the 28th annual Euromoney Awards for Excellence 2023; and the Best SME Bank Nigeria 2022 by the Global Banking & Finance Awards. The bank has also won awards for the “Fastest Growing Bank” and “MSME & Entrepreneurship Financing Bank of the Year” at the 2021 BusinessDay Banks and Other Financial Institutions (BAFI) Awards.
Fidelity Bank has a structured corporate governance framework, which supports the Board’s objective of achieving sustainable value. This is reinforced by the right culture, values and actions at the Board and Management level and throughout the entire organisation.
The Board of Directors commits to ensuring sustainable long-term success for the Fidelity Bank and is mindful that best practice in corporate governance is essential for ensuring accountability, fairness and transparency in a company’s relationship with all its stakeholders.
Fidelity Bank’s shared values of Customer First, Respect, Excellence, Shared Ambition and Tenacity (CREST) continue to be the guiding principles, which it believes are necessary to sustain the growth of the business and the bank’s relationship with stakeholders, while keeping faith with its vision to be number one in every market it serves and for every branded product it offers.
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