Unites States’ Global X Management-backed Fidelity Bank, which Tuesday announced a binding agreement for full acquisition of Union Bank UK, reported for the period from January through June a net profit 20.7 per cent greater than a year ago, according to its audited financials seen by PREMIUM TIMES.

The earnings surge rode on the back of interest income-driven growth that saw revenue accelerate by 37.9 per cent to N154.8 billion, a level never before seen since the commercial lender opened shop to clients as a merchant bank in 1988.

Its shares, quoted on Lagos’s Custom Street, had already climbed 4.6 per cent to N3.18 per unit at 11:13 WAT on Wednesday following the news, with the board’s announcement of an interim dividend of N0.10 per unit in a separate document further stoking activity in the stock.


The planned cash payout signposts the first time ever Fidelity Bank will be paying an interim dividend and it will be committing N2.9 billion to that purpose, based on outstanding shares of around 29 billion units.

Quickening by 48.5 per cent, interest and similar income for the period leapt to N126.3 billion.

Its loan portfolio for the period stood at N2 trillion, over one-fourth of that provided by lending to oil and gas.

But fees and commission, the firm’s second major income source contributed much less at N16.1 billion and, worthy of note under this category is commission on e-banking activities, contributing as little as N1.1 billion at a time peers like FBN Holdings, Zenith Bank, GTCO, Access Holdings and UBA are feasting big on e-channels income, some of them even building their hopes of revenue spur around it.

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Other operating income tumbled from N10.5 billion to N2.5 billion, with net foreign exchange loss standing at N1.5 billion in stark contrast to gains of N8.4 billion a year earlier.

Fidelity Bank this July took over Benin, Kano and Kaduna power distribution companies after activating the call on the collateralised shares of the trio and also began action to take over their boards, a potential boost to its asset base, which it has been raring to enlarge to measure up to the preconditions of becoming a tier-1 bank come 2025.

Global rating agency Fitch upgraded the bank’s long-term issuer defaulting status to ‘B’ from ‘B-’ in June.

Pre-tax profit for the period stood rose to N25.1 billion by 21.6 per cent, while profit after tax increased at about the same pace to N23.3 billion.

Net profit margin, the metric that gauges how much of revenue has turned into profit, stood at 15 per cent, indicating the impact of high cost pressure on gross earnings.