-Investors
delighted with bank’s impressive performance
Shareholders have
expressed readiness to massively support and mobilise for the ongoing
recapitalisation of Fidelity Bank Plc amid commendations for the impressive
performance of the bank over the years.
Shareholders were
unanimous that Fidelity Bank has shown strong resilience over the years and
demonstrated its investors’ friendliness with significant dividends and capital
gains.
Shareholders,
under the auspices of Nigeria’s leading shareholders’ associations, said they
would buy into any share offering by Fidelity Bank as the bank holds exciting
future for above-average returns.
The sundry
shareholders’ endorsements underlined market pundits’ expectations that
Fidelity Bank would easily raise additional funds and retain its status as one
of Nigeria’s leading commercial banks with international authorisation.
With nearly 400,000 shareholders, Fidelity Bank has the most diversified retail shareholders’ base among Nigerian banks. No single shareholder held up to 5.0 per cent of the issued share capital of the bank. Five per cent and above are considered the material shareholding under extant laws and market regulations.
The highly
diversified shareholding base, while it has its challenges of corporate
register management and stock volatility, shows Fidelity Bank as a popular
stock. Its huge free float also underscores the pricing efficiency of the stock
at the stock market, ensuring that the share price is a reflection of the
bank’s fundamental and investors’ expectation.
With average
annual return of more than 81 per cent over the past five years, comparative
analysis shows that Fidelity Bank outperforms all other major market indices
with the bank’s average annual return for the period twice the average return
by the overall market and almost four times of average return in the banking
sector.
Shareholders said
the performance of Fidelity Bank has endeared them to the bank, expressing
optimism that the bank is poised for major leap in the emerging Nigerian
financial services sector.
National
Coordinator, Independent Shareholders Association of Nigeria (ISAN), Mr. Moses
Igbrude, said Fidelity Bank has shown that shareholders can trust it for
sustainable growth and returns.
“Fidelity Bank is
a promising bank that is growing organically, it is servicing its niche and
share of the market. My appeal to the board is to continue to imbibe good
corporate governance in order to sustain this growth,” Igbrude said.
President,
Association for the Advancement of Rights of Nigerian Shareholders (AARNS), Dr.
Faruk Umar said the performance of Fidelity Bank over the years has been very
encouraging.
According to him,
the bank has a very good corporate governance structure that reassures
investors of the safety of their investments.
He pointed out
that the successful acquisition of Union Bank UK was a testimony to the
financial strength of the bank.
“The bank has
since joined the league of banks paying interim dividend, which shareholders
are happy with,” Umar said.
He commended the
board and management of the bank “for the good results they have been posting”,
noting that investors have confidence in the future of the bank.
“The appointment
of Dr Nneka Onyeali-Ikpe as the Group Managing Director, after serving as
Executive Director, indicates that the bank has a good succession planning in
place. The calibre of the independent non-executive directors on the board
gives shareholders strong confidence of the kind of board oversight they will
be expecting.
“Now that the bank
is coming out with a rights issue offer, we are very confident shareholders
will take their rights , and we are sure the bank will meet the
recapitalisation requirement set out by the Central Bank of Nigeria (CBN),”
Umar said.
National
Coordinator, Pragmatic Shareholders Association of Nigeria, Mrs. Bisi Bakare,
said Fidelity Bank has created a “very excellent impression” in the minds of
shareholders.
According to her,
the bank has continually showcased exemplary leadership with continuous
impressive results, with successive growths over the past five years.
“Despite various
challenges and economic uncertainty and other unforeseen occurrences, Fidelity
Bank weathers the storm with strong performances,” Bakare said.
She cited the 2023
business year when the bank doubled its pre-tax profit by 131.5 per cent to
N124.2 billion on the back of 64.9 per cent growth in gross earnings to N555.8
billion. The bank’s deposits increased by an impressive 56 per cent from N2.6
trillion in 2022 to N4.0 trillion while total assets grew by 56 per cent from
N3.9 trillion to N6.2 trillion.
“Furthermore,
Fidelity Bank paid a dividend of 85 kobo, including interim dividend of 25 kobo
and final dividend of 60 kobo. Considering the share price of Fidelity Bank,
their dividend policy is very robust.
“It is evident
that our bank has not only weathered the storm of economic challenges but has
also managed to thrive. Fidelity Bank is a very good bank that shareholders are
very happy with their investments and we have never regretted buying into
Fidelity Bank.
“I believe their
right issue is going to be oversubscribed considering their past performances,”
Bakare said.
National
Coordinator, Progressive Shareholders Association of Nigeria, Mr. Boniface
Okezie said Fidelity Bank’s growth has been “very amazing as it has delivered
good returns in terms of good dividends to shareholders”.
According to him,
shareholders are proud of the bank’s balance sheet, which is something that
gives shareholders hopes for better rewards in the years ahead.
“All that average
investors look for in a company is the fundamental, and Fidelity Bank is very
strong in this. They are poised to surpass what they have projected. I should
say the sky is their limit despite the headwinds.
“Fidelity Bank
remains one of the best stocks that investors should look forward to invest in
for better returns. I'm very optimistic of the bank’s healthy strong assets.
With its good corporate governance and excellent customers’ service, there is
every reason to hope for more promising future,” Okezie said.
The interim report
and account of the bank for the first quarter ended March 31, 2024 showed that
the bank started the current business year on stronger footing with three-digit
growths across key performance indicators.
The three-month
report, released at the NGX, showed that gross earnings increased by 89.9 per
cent to N192.1 billion in first quarter 2024. The bank’s top-line performance
continued to be driven by broad-based growths across income lines with interest
income rising by 90.7 per cent and non-interest income growing by 84 per cent
in first quarter 2024.
Growth in interest
income was primarily spurred by a higher yield environment and strong earning
assets base, while the increase in non-interest income was led by double-digit
growth in account maintenance charges, foreign exchange (forex)-related income,
trade, banking services, and remittances, supported by increased customer
transactions.
Profit before tax
doubled by 120 per cent to N39.5 billion in first quarter 2024 as against N17.9
billion in first quarter 2023. The bank’s performance was driven by expanding
market share with total deposit rising by 17 per cent within the three months
to N4.7 trillion, compared with N4 trillion recorded at the end of 2023. The
bank also increased its supports for national economic growth with net loans
and advances rising by 21 per cent from N3.1 trillion at the end of 2023 to
N3.7 trillion by March 2024.
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