May 25, (THEWILL) – Fidelity Bank was the toast of equity investors during the week as the stock drove NGX early rally on Friday. This was sparked by the massive hunt for bank stocks as investors hustle to take positions in the current recapitalisation exercise.
Fidelity’s rally during the week points to a sharp rise after a spate of negative performance that has now been substantially corrected. This culminated in stock picking a place in the club of topmost three equities that determined the performance of the market for the third trading week of May.
Fidelity Bank closed its last trading day (Friday, May 23, 2025) at N18.65 per share on the Nigerian Exchange (NGX), recording a 7.5 percent gain over its previous closing price of N17.35. Fidelity began the year with a share price of N17.50 and has since gained 6.57 percent on that price valuation.
“Fidelity is strong; the bank’s recent performance points in that direction. It was the first to embark on the recapitalisation outing while the others were yet to commence. Its shares were oversubscribed and its successful acquisition of the Union Bank UK subsidiary positions it for a greater deal”, said Adewale Braimoh, a financial analyst.
Data from the NGX showed that Fidelity Bank is the second most traded stock on the Nigerian bourse over the past three months (Feb 19 – May 23, 2025).
The stock has traded a total volume of 2.75 billion shares—in 34,194 deals—valued at N52.1 billion over the period, with an average of 43.6 million traded shares per session.
A volume high of 389 million was achieved on April 23rd, and a low of 6.23 million on February 24th, for the same period.
Trading in the top three equities including Fidelity Bank Plc (measured by volume) accounted for 1.610 billion shares worth N8.897 billion in 8,079 deals, contributing 40.95 percent and 11.89 percent to the total equity turnover volume and value respectively.
A total turnover of 3.932 billion shares worth N74.813 billion in 105,220 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 2.606 billion shares valued at N63.785 billion that exchanged hands in the previous week in 77,593 deals.
Fidelity thus played a role in the Financial Services performance (measured by volume) which led the activity chart with 2.405 billion shares valued at N32.271 billion traded in 44,570 deals; thus contributing 61.16 percent and 43.14 percent to the total equity turnover volume and value respectively.
After muted days of buy activities, Nigeria’s stock market recorded early rally on Friday as investors pounced on the stocks of Fidelity Bank Plc. As at 11am, the NGX All Share Index (ASI) was up by 0.19 percent to 109,385.94 points. Fidelity Bank was up to N18.60, after adding N1.255 (6.63 percent).
The renewed rally in the lender’s stock hinges on the FY2024 impressive performance.
Fidelity Bank Plc consolidated its place in the top industry leadership league with its shareholders’ funds surging to N897.87 billion in FY 2024, from N437.30 billion in the previous year, constituting a 105.32 percent growth.
The surge was driven by an expansion in share capital and premium accounts which recorded an increase of 133.58 percent to N305.55 billion.
This stellar performance suggests that Fidelity is making significant advancement toward meeting the Central Bank of Nigeria (CBN) new capital requirement of N500 billion for banks with international licence. Fidelity Bank completed its acquisition of 100 percent equity in Union Bank UK, a subsidiary of Union Bank Plc, in September 2023.
It explained that the acquisition aimed at strengthening its strategic initiatives on international expansion as it planned to expand into five African countries via acquisition.
The stellar performance deepens the Capital Adequacy Ratio by 23.5 percent – a positive result from the capitalisation of its half year result.
The bank completed the first phase of its capital raising exercise through a Public Offer and Rights Issue in 2024, which were oversubscribed by 237.92 percent and 137.73 percent, respectively.
A total of N175.9 billion was recognised as fresh capital in 2024 financial year from the exercise, which had a positive impact on its Capital Adequacy Ratio (CAR) at 23.5 percent.
The bank says it plans to conclude the second phase by Q3 2025, ahead of the March 31, 2026 CBN’s recapitalisation deadline.
THEWILL reports that Fidelity Bank surpassed its capital-raising target of N127.1 billion, marking the completion of the first phase of its recapitalisation efforts.
The combined offer, which marked the first phase of the bank’s capital raising, was judged a resounding success according to analysts.
The bank further stated that it also received shareholders’ approval to accept surplus monies arising from potential oversubscription subject to the Company’s issued share capital.
The 2024 CAR of 23.5 percent points to the bank’s determination to remain in the industry leader cycle in the post-recapitalisation environment that would redefine the financial services space as technology dominates operations.
Fidelity’s financial ratios improved with rising profitability ratios, stronger cost efficiency, and higher asset utilisation.
Analysis of the 2024 audited financial statement showed that return on equity and assets increased to 41.70 percent and 3.15 percent, respectively.
Similarly, net profit margin and net interest margin increased to 26.65 percent and 12.00 percent, respectively. The cost-to-income ratio and cost of risk declined to 42.90 percent and 1.50 percent respectively.
“Fidelity was the first to go to the capital market for the recapitalisation scheme among the other deposit money banks. Its performance trajectory affirms its industry leadership. Shareholders’ equity is stronger than ever in the history of the bank; the post-recapitalisation era would push Fidelity to global spotlight,” said Andy Ekwerugo, an investment banker.
Key takeaways from its 2024 financial statement include the fact that Fidelity has sufficient capacity to absorb loan delinquency.
This is an essential characteristic during a capital raise, as it builds investor confidence in the banking group’s ability to weather economic or operational shocks. The loan default allowance ratio of over 100 percent (precisely 149 percent) attests to this fact.
Fidelity’s earning growth rate of 51.7 percent, over an annualized average of five years’ data against industry’s earnings growth rate of 30.4 percent, puts it on a comfortable operating zone as competition intensifies after the recapitalisation.
Furthermore, the five-year average earnings per share (EPS) growth rate of 49.3 percent, primarily driven by rapid growth in top-line earnings, will make the stock investors’ delight.
With a dividend yield of 11 percent and a payout ratio of 24 percent, the shareholders’ funds surge in 2024 gives a fresh insight into the robust stability of the lender.
Fidelity Bank Plc recorded a pre-tax profit of N385.215 billion for the 2024 financial year that ended December 31, marking an impressive 210.01 percent year-on-year (YoY) growth. Despite a windfall tax of N13.33 billion, post-tax profit surged by 179.63 percent to N278.106 billion.
The audited financial statement showed that gross earnings grew by 87.72 percent to N1.043 trillion, with core operational income contributing about 97 percent of total revenue.
Fidelity Bank Plc recorded a pre-tax profit of N385.215 billion for the 2024 financial year that ended December 31, marking an impressive 210.01 percent year-on-year (YoY) growth.
Despite a windfall tax of N13.33 billion, post-tax profit surged by 179.63 percent to N278.106 billion.
The audited financial statement showed that gross earnings grew by 87.72 percent to N1.043 trillion, with core operational income contributing about 97 percent of total revenue.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
