Fidelity Bank Plc has demonstrated remarkable resilience and growth, recording an impressive average annual profit increase of 64% over the past three years.
This performance underscores its status as one of Nigeria’s fastest-growing companies.
The bank has experienced rapid expansion in both customer base and assets, with its total balance sheet size surging from N2.1 trillion to N6.2 trillion, making it the sixth largest in the Nigerian banking industry. This growth has been driven by substantial total deposits exceeding N4 trillion, also ranking as the sixth largest in the industry.
A review of Fidelity Bank’s audited reports from 2020 to 2023 reveals consistent double-digit growth across various metrics.
The bank’s cumulative average annual growth rate (CAGR) in earnings, profitability, and assets has significantly outperformed the average industry rate, placing it among the best-performing publicly quoted companies.
The 64% average annual profit growth highlights Fidelity Bank’s fundamental strength as an inflation-hedging investment. This operational growth enhances the bank’s overall return outlook, with its share price delivering an average annual capital gain of more than 100% over the past five years.
Several expert reviews have cited the bank’s strong historical performance as a key attraction for its ongoing combined rights and public offer. Fidelity Bank is offering a rights issue of 3.2 billion ordinary shares at N9.25 per share and a simultaneous public offer of 10 billion ordinary shares at N9.75 per share.
The acceptance and application period for these offers, which opened on June 20, 2024, is scheduled to close on July 29, 2024. The rights issue has been pre-allotted on a basis of one new share for every 10 existing shares held as of January 5, 2024.
Fidelity Bank’s gross earnings have risen successively from N206 billion in 2020 to N251 billion in 2021, N337 billion in 2022, and N556 billion in 2023, representing an average annual growth of 39%. Profit before tax has similarly grown from N28 billion in 2020 to N124 billion in 2023, while profit after tax has increased from N26.65 billion to N99.45 billion over the same period. Earnings per share have also grown from 92 kobo in 2020 to N3.11 in 2023, reflecting the potential for increased dividends to shareholders.
This robust profitability has been driven by continuous market share gains, strong support for national economic growth, and high customer trust. Fidelity Bank’s total assets have grown successively from N2.11 trillion in 2019 to N2.76 trillion in 2020, and further to N3.28 trillion, N3.99 trillion, and N6.23 trillion in 2021, 2022, and 2023, respectively. Shareholders’ funds have similarly increased from N234.03 billion in 2019 to N437.31 billion in 2023.
Total deposits have grown at an average annual rate of 33%, rising from N1.7 trillion in 2020 to N4.02 trillion in 2023. This growth reflects strong customer confidence, with low-cost deposits accounting for 97.4% of the total. Low-cost deposits have grown at a faster CAGR of 44%, increasing from N1.31 trillion in 2020 to N3.91 trillion in 2023. Savings accounts have also doubled from N424 billion in 2020 to N881 billion in 2023, representing an average annual growth rate of 28%.
Fidelity Bank now serves over 8 million customers, with 5.1 million of them using digital channels, highlighting the bank’s robust information and communication technology infrastructure. The bank has shown a strong commitment to supporting national economic growth, with net loans increasing by an average annual rate of 32%. Net loans have grown from N1.32 trillion in 2020 to N3.09 trillion in 2023, making Fidelity Bank’s loan portfolio the fifth largest in the Nigerian banking industry.
Dr. Kamoru Yusuf, Founder of KAM Holding and a customer of Fidelity Bank, praised the bank for its exceptional support of Nigerian businesses. He emphasized that investing in Fidelity Bank is akin to investing in the growth of the Nigerian economy and companies like KAM Holding, the nation’s largest wholly indigenous metal and steel production company.
There are strong indications that Fidelity Bank will sustain its impressive growth trajectory. The bank’s interim report for the first quarter of 2024 showed continued strength, with gross earnings increasing by 89.9% to N192.1 billion. Interest income rose by 90.7%, and non-interest income grew by 84%, driven by higher yields and increased customer transactions. Profit before tax doubled to N39.5 billion in the first quarter of 2024, compared to N17.9 billion in the same period in 2023. Total deposits increased by 17% within the first three months of 2024, reaching N4.7 trillion, while net loans and advances rose by 21% to N3.7 trillion, demonstrating Fidelity Bank’s continued support for the Nigerian economy.
