Fidelity Bank Plc (NSE ticker – FIDELITYBK) on Thursday after trading hours, released its first half of the year financial statements for the period ended 30 June 2020.
The tier two bank reported an increase in both gross earnings and profit after taxation. The bank seems to have weathered the economic storm of the Covid-19 pandemic and the lockdown that ensued.
FIDELITYBK did not announce the proposal of interim, which is not out of the ordinary, since the bank is not in the league of interim dividend-paying banks on NSE.
It’s Capital Adequacy Ratio (CAR) increased to 18.76% from 18.29% as at 31 December 2019, (Minimum Capital Adequacy Ratio – 15%)
The bank has an 86% loan to deposit ratio at the end of the period in review.
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Report details; Income statement
Gross earnings rose by just over N2 billion (2.02% rise) to N105.755 billion in H1 2020 from N103.655 billion recorded in H1 2019.
Profit for the period similar rose by N2.805 billion (33% rise) to N11.303 billion from N8.498 billion reported in H1 2019.
The basic earnings per share grew by 10kobo to 39kobo in H1 2020 from 29kobo.
The company’s main source of revenue is “interest revenue” which contributed 82.33% of the total gross earnings. The interest revenue increased to N87.070 billion from N84.290 billion in H1 2019.
Other major revenue components are;
- Fees and commissions income – N9.535 billion a decrease from N13.069 billion in H1 2019
- Other operating income – N8.598 billion an increase from 4.756 billion in H1 2019.
The bank also registered N2.956 billion from net gains from financial assets at fair value through profit or loss, a significant rise from N129 million registered in the same period in 2019.
On the expense column, it was observed that the bank’s interest expense dropped by 19.68% (N9.629 billion) to N39.302 billion from N48.931 billion reported in H1 2019.
- On the other hand fees and commissions expense rose to N2.764 from N2.401 billion
- Personnel expenses – N12.190 billion from N11.675 billion H1 2019
- Other operating expenses – N31.621 billion from N29.209 billion in H1 2019
The bank recorded minus N7.841 as “credit loss (expense)/reversal” with a major component as N6.772 billion from loans and advances to customers in H1 2020, against a positive N5.326 billion reported in H1 2019.
Report details; statement of financial position
Total assets – N2.403 trillion slightly up from N2.114 trillion as at 31 December 2019.
Just over 50% of the total assets are “loans and advances to customers” which amounts to N1.209 trillion an increase from N1.127 trillion as at December 2019.
The bank’s cash and balances with the Central of Nigeria rose to N601.560 billion from N453.392 billion
FIDELITYBK has a total investment of N314.247 billion made up of financial assets, debt, and equity instruments.
The bank has a total liability of N2.152 trillion an increase from N1.225 trillion due to the increase recorded in deposit from customers to N1.406 trillion, which represents over 65% of the total liability.
The total equity stood at N250.689 billion with retained earnings of N49.865 billion.
Cash flow statement
The bank generated N21.312 billion net cash from operating activities an outstanding increase from N37.200 billion used in the same activities in H1 2019.
Net cash of N4.601 billion was used in investing activities compared to N19.754 billion generated from the activity in H1 2019.
The net cash used in financing activities rose to N24.847 billion from N9.554 billion generated in H 2019 due to N12.658 spent on the “payment of interest portion of debts issued and other borrowed funds” and N9.672 spent on “repayment of the principal portion of debts issued and other borrowed funds.”
However, the cash and cash equivalents as at 30 June 2020 stood at N259.222 billion due to N259.915 billion cash and cash equivalents at 1 January.
The share price at the close of trading on Thursday was N1.80.
YTD the share price is down by 12.20%
One year – up by 16.13%
Three years – up by 33.33%
Five years – up by 21.62%