Fidelity Bank sees loan growth of 10 pct this year

Nigeria’s Fidelity Bank expects to grow loans by 10 percent this year, short of 27.1 percent growth last year, the mid-tier lender said.

Loans grew by 5.8 percent in the first half, with a currency devaluation contributing to a growth of 2.6 percent in its loan book, Fidelity Bank said presenting its half-year results.

Nigeria’s Fidelity Bank had earlier raised 30 billion naira ($151 million) through an unsecured bond at 16.48 percent, to fund increased lending to small businesses and retail clients, financial advisers to the issue said.

According to the bond prospectus the fixed-rate bond due 2022 was fully underwritten and will be quoted on the Nigerian Stock Exchange. Fidelity Bank can redeem the bond after five years, it said.

Nigerian lenders have been shoring up their balance sheets after adopting stricter international capital requirements, which has meant capital ratios for most lenders dropping by between 100 and 400 basis points to near the regulatory minimum of 16 percent.

Fidelity, whose other borrowings including a $300 million debut Eurobond amounted to 90.73 billion naira as at December 2014, has a capital ratio of 22.6 percent.

Fidelity, which achieved a pretax profit of 16.5 billion naira in 2014, said it expects profit this year to reach 23.5 billion naira, it said in the bond prospectus.