April 07, (THEWILL) – 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 April 2026 CBN’s recapitalisation deadline.
In 2023, Fidelity Bank’s CAR stood at 16.2 percent which was well above the regulatory requirement of 15 percent.
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 current 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.
“We are excited about the opportunities in our market and pleased with our performance trajectory. The additional capital will enable your Company to take advantage of emerging business opportunities while enhancing long-term profitability, competitive advantage and increasing shareholder value,” Fidelity Bank stated in the notice of the extraordinary general meeting (EGM) held in 2024.
The EGM was to seek the approval of shareholders for its issued share capital to be increased by the creation of up to 20 billion additional ordinary shares of 50 kobo each ranking pari-passu with the existing ordinary shares.
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.
The Board has proposed a final dividend of N1.25k per share (up from N0.85k in 2023), payable on April 29, 2025.
This brings the total dividend for 2024 to N2.10k per share, including the N0.85k interim dividend, to be paid from retained earning
The current share price of Fidelity Bank Plc closed its last trading day (Friday, April 4, 2025) at N19.95 per share on the Nigerian Exchange (NGX), recording a 2.3 percent gain over its previous closing price of N19.50.
Fidelity began the year with a share price of N17.50 and has since gained 14 percent on that price valuation.
“Shareholders can be optimistic about Fidelity Bank knowing the stock has accrued 16 percent over the past four-week period -10th best on NGX,” analysts at NGX said.
Data by NGX revealed that Fidelity Bank is the fourth most traded stock on the Nigerian Stock Exchange over the past three months (Jan 6 – Apr 4, 2025).
The stock has traded a total volume of 1.4 billion shares—in 25,682 deals—valued at N25.6 billion over the period, with an average of 22.2 million traded shares per session.
A volume high of 67.8 million was achieved on February 10th, and a low of 3.15 million on January 15th, for the same period.
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.
