Fidelity Bank posts N106b gross earnings in Q3

Fidelity-Bank-Plc-Lagos-Head-OfficeFidelity Bank Plc has posted gross earning of N106 billion and profit after tax of N11.4 billion in its third quarter operations.
Specifically, the banks third quarter result for the period ended September 30, 2015 showed an increase of 11.0 percent and 1.8 percent in its gross earnings and profit respectively.
Gross earnings grew from N96.0 billion to N106.6billion whiile profit after tax (PAT) went up by 1.8 percent to N11.4 billion as against N11.2 billion made in the corresponding period in 2014.
Total equity also increased by 4.2 percent to N180.3 billion from N173.1billion as at December 2014, operating income stood at N62.0 billion, a 9.7 percent rise compared to N56.5 billion in the nine month period.
The Managing Director and Chief Executive Officer of the bank , Nnamdi Okonkwo explained that business operations during the period under review were constrained by regulatory and economic pressures arising from currency devaluation concerns, tight monetary stance, and implementation of the Treasury Single Account (TSA).
This situation, Okonkwo explained, had culminated in negative earnings in the banking sector.
He however, expressed optimism in the new business model,which the Bank adopted.
He said that the model has resulted in a year-on-year (y-o-y) growth in both fund and fee based income resulting in a three  percent growth in profitability. “Despite these challenges we continued with the disciplined execution of our medium term strategy. Profit before Tax (PBT) increased to N13.8bn despite the decline in our total assets due to the TSA implementation”.
Okonkwo explained that  interest income increased by 10.8 percent y-o-y to N40.6 billion but declined by 4.8 percent q-o-q due to the reduction in its earning assets.
He, however pointed out that the bank continued to increase yields on earning assets faster than growth in funding costs, which improved its NIM (Net Interest Margin) to 6.9 percent in third quarter of 2015. This growth put the bank in pole position to attain its 2015 target of 7.0 percent.
According to the Bank Chief, Net Fee Income increased by 7.7 percent y-o-y to N21.4 billion but declined by 4.2 percent quarter-on-quarter (q-o-q) due to lower FX (Foreign Exchange) Income on the back of trading restrictions in the market. Alluding to the impact of the Bank’s current retail strategy in driving revenues, Okonkwo stated:    “Electronic banking income increased by 128.4 percent y-o-y to N4.5 billion and 115.4 percent q-o-q”, adding that this was driven essentially by the deployment of the Bank’s innovative online banking application, increased migration of customers to alternate electronic channels as well as a rise in international card transactions.
He explained that total expenses grew by 10.3 percent y-o-y to N44.8 billion and 6.3 percent q-o-q driven by cost lines like staff remuneration, regulatory costs (NDIC/AMCON) and branding/advertisement costs.
Cost-Income Ratio declined to 71.6 percent in 9M 2015 from 74.2 percent in the 2014 FY as revenue growth outpaced the increase in operating cost.
Net Loans, on the other hand, grew marginally by 1.1 percent YTD to N547.7 billion but declined by 4.4 percent q-o-q

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