May 21, 2025/CSL Research
Fidelity Bank has issued a public statement in response to a recent publication by Peoples Gazette titled “EXCLUSIVE: Fidelity faces bankruptcy as Supreme Court orders banking giant to pay ₦225 billion damages to Nigerian firm.” The Bank refutes this claim and provides background to a long-standing legal dispute involving a legacy transaction inherited from the defunct FSB International Bank.
The dispute relates to a US$3 million credit facility issued in 2002, which became the subject of prolonged litigation involving third-party claims on a mortgaged property in Ikoyi. While the courts have issued rulings, the final interpretation and computation of financial liability remain contested, with Fidelity actively seeking judicial clarification.
The ₦225 billion figure cited in the media is not supported by Fidelity’s internal calculations. Based on legal and exchange rate precedents, Fidelity estimates its share of liability to fall between ₦14 billion and ₦30.7 billion, with shared responsibility alongside G. Cappa Plc.
Fidelity Bank has applied to the courts for a definitive ruling on the quantum payable, and the Court has ordered a status quo to be maintained, restraining further public commentary while motions are being determined. Fidelity has expressed concern over media non-compliance with the court injunction and considers the publication as a malicious attempt to undermine stakeholder confidence. The Bank has initiated steps to address these issues legally, reinforcing its commitment to transparency, compliance, and reputational integrity.
In our view, Fidelity Bank’s strong profitability, capital position, and liquidity profile reinforce its ability to absorb the financial impact of the ongoing legal proceedings without any threat to solvency. The worst-case estimated liability of ₦30.7 billion represents less than 4% of total shareholders’ equity (₦933.1 billion as of Q1 2025), and is shared with G. Cappa Plc. In Q1 2025, the Bank reported a Profit After Tax of ₦91.1 billion, a 190% increase from ₦31.4 billion in Q1 2024. Annualized, this equates to a projected full-year profit exceeding ₦360 billion.
On that basis:
• The ₦30.7 billion estimated liability, even if fully borne by Fidelity (which is unlikely), would represent just about 9% of expected 2025 profits.
• Even in the highly improbable scenario that the full ₦225 billion claimed in media reports were imposed solely on Fidelity Bank, the Bank’s expected earnings could absorb the impact without eroding capital.
While the matter introduces a degree of legal uncertainty, there is no risk to the Bank’s solvency or operational stability. Fidelity Bank remains fully compliant with regulatory capital and liquidity requirements, well capitalized and profitable and financially sound, as demonstrated by its robust Q1 2025 performance. The Bank is currently awaiting the Court’s clarification on the appropriate computation of liability. In the meantime, it continues to engage proactively with regulators, shareholders, and stakeholders, and is closely monitoring legal and media developments to ensure timely and accurate updates.
Click here to download full report: CSL Nigeria Daily – 21 May 2025 – banks.pdf
