By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)-Nigeria’s tier one lender, Fidelity Bank Plc has reported its profit before tax (PBT) for the period ended March 31, 2016 was N4.0 billion from N4.7 billion recorded the same period of 2015.
The Bank said profit after tax (PAT) in the first quarter (Q1) of 2016 was N3.6 billion from N4.0 billion declared in the Q1 of 2015.
Gross earnings in the review period of N34.4 billion compared to N36.4 billion posted in the corresponding period of 2015.
“Our financial performance for the quarter is reflective of the continued slowdown in business activities; due to lower government revenues arising from depressed oil prices, lower interest rate regime and weaker macro-economic environment.
We continued to improve the earnings capacity of our balance sheet (fund based income) despite the decline in fee income. Though gross earnings declined by 5.5% (due to a N4.2 billion drop in our foreign exchange income), net interest income increased by 30.0%, e-banking income by 216% and net operating income by 6.2% respectively,” the lender said in a statement.
According to Fidelity Bank, in line with its focus on balance sheet optimisation, they ensured that the reduction in funding costs outpaced the decline on yields on earning assets. This improved its NIM to 7.3% from 6.9% in the 2015FY.
It said though operating expenses increased by 15.7% YOY, expense growth was flat when compared with 2015FY quarterly annualised figures and actually declined by 24.1% from Q4 2015.
“Our cost of risk remained within our guidance of 1.0% as we saw a decline of our risk asset portfolio in most sectors due to the weaker macro-economic indices, overall loan growth of 2.1% was basically driven by public sector on-lending facilities.
Our NPL ratio declined to 4.3% largely due to the growth in the loan book while our regulatory ratios remained well above the set thresholds, our capital adequacy ratio at 19.3% gives us ample leverage to take advantage of emerging business opportunities,” Fidelity Bank affirmed.
The lender said that total deposits increased by 1.9% and the disciplined execution of its retail strategy continued to deliver strong results as savings deposits grew by 13.4% in the quarter under review.
“Our key objectives for the 2016FY remains; redesigning our systems and processes to enhance service delivery, cost optimization initiatives to reduce expenses by 5%, proactive risk management, increased customer adoption/migration to our digital platforms and increasing our retail banking market share,” Fidelity Bank added.
