Financial Highlights
* Gross Earnings increased by 13.6% to N71.9bn from N63.3bn in H1 2014
* Net Fee Income increased by 25.9% to N15.2bn from N12.1bn in H1 2014
* Operating Income increased by 14.1% to N42.0bn from N36.8bn in H1 2014
* Total Expenses increased by 13.8% to N28.8bn from N25.3bn in H1 2014
* Profit before Tax increased by 2.5% to N9.7bn from N9.4bn in H1 2014
* Profit after Tax increased by 2.5% to N8.2bn from N8.0bn in H1 2014
* Net Loans increased by 5.8% to N572.8bn from N541.7bn in Dec 2014
* Deposits declined by 2.9% to N796.6bn from N820.0bn in Dec 2014
* Total Equity increased by 3.1% to N178.6bn from N173.1bn in Dec 2014
* Total Assets increased by 0.5% to N1,192.7bn from N1,187.0bn in Dec 2014
Nnamdi Okonkwo, Managing Director and CEO of Fidelity Bank plc commenting on the results, stated that:
“Business operations in H1 2015 were challenged by a difficult operating environment due to heightened political risks in Q1, weaker government revenues arising from lower crude oil prices, a tighter monetary policy environment and currency devaluation concerns which all translated to a significantly lower GDP growth rate.
Despite these challenges we continued with the disciplined execution of our medium term strategy (albeit taking into consideration the weaker macro-economic environment). Profit before Tax (PBT) increased to N9.7bn despite significantly increased loan provisions anchored on our conservative view of selected sectors. We are pleased with the year-on-year (y-o-y) and quarter on quarter (q-o-q) growth in our profitability given the reduced level of business activities in H1 2015.
Net Interest Income increased by 8.3% y-o-y to N26.8 billion and 16.7% q-o-q as we increased yields on earning assets faster than the growth in funding costs. This increased our NIM to 6.6% in H1 2015 placing us closer to our 2015 target of 7.0%. Net gains on financial instruments was N1.1bn in Q2 against a loss of N1.5bn in Q1 as we continued to optimize our balance sheet.
Net Fee Income increased by 25.9% y-o-y to N15.2 billion but declined by 25.6% q-o-q due to lower FX Income on the back of trading restrictions in the market. Our retail strategy continued to deliver increased revenues as electronic banking income increased by 65.2% y-o-y to N2.0 billion and 37.4% q-o-q driven by the increased migration of customers to our electronic channels and improved customer experience.
Operating Expense grew by 13.8% y-o-y to N28.8 billion and 8.4% q-o-q on the back of increased staff remuneration and promotions, regulatory costs (NDIC/AMCON) and advert costs. However, Cost-Income Ratio declined to 69.2% in H1 2015 from 74.2% in the 2014FY as revenue growth outpaced the increase in operating cost.
Loan growth picked up in Q2 (5.8% YTD growth) with the conclusion of our N30 billion bond. Cost of Risk increased to 1.1% (slightly above our guidance) as we improved our coverage ratio, NPL Ratio remained within our guidance at 3.7% due to the growth in the loan book.
Total Deposits declined by 2.9% YTD to N796.5 billion and 0.1% q-o-q as tighter monetary policy and the CRR harmonization increased effective funding costs. With Private Sector Depositors accounting for 87% of our deposits, we sterilized an additional N21 billion due to the CRR harmonization. Though Interest expense increased by 9.1% y-o-y, it declined by 1.9% q-o-q due to the diversification of our funding sources.
We remain focused on the execution of our medium term strategic objectives in the Retail/SME/E-Banking and Niche Corporate Banking segments and look forward to delivering another positive set of results in the next quarter”
ANALYSTS AND INVESTORS CONFERENCE CALL INVITATION
Fidelity Bank Plc Senior Management would be hosting a Conference Call with Investors/Analysts on the H1 2015 Unaudited Financials on Monday, July 27, 2015 at 15.00 hours Lagos Time / 15:00 BST / 14:00 GMT. There will also be an opportunity for management to take questions from Investors .