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Banking Sector

Fidelity Bank: Leading Through Innovation

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Fidelity Bank - Investors King

Adaptability and constant innovation, according to Indian billionaire industrialist and philanthropist Shiv Nadar, are critical to the survival of any business operating in a competitive market. More specifically, for banks, innovation is a business imperative that must focus on providing a competitive advantage and creating value for businesses and customers.

From the early days of their pioneering initiative, the flagship instant banking product *770#, which was the first of its kind in the Nigerian banking industry, to the revolutionary ‘Pay Yourself’ digital service, Fidelity Bank Plc has remained one of the Nigerian financial sector’s leading pioneers of digital banking.

In keeping with its mission to make financial services easy and accessible to its customers, the bank has launched a number of digital products and services over the years.

According to a 2020 United Nations report, Nigeria has one of the world’s youngest populations, with 62 percent of the population under the age of 25. To serve the demands of this young populace, who live in a fast-paced digital world, Fidelity Bank, under the audacious leadership of its Managing Director/ CEO, Mrs. Nneka Onyeali-Ikpe, has proven its commitment to connecting its customers to a world of limitless opportunities through their digital banking services.

Taking this resolve to a completely new level, the leading financial institution has introduced a number of products and services aimed at making banking simple and stress-free. Among them are the following:

● Pay Yourself for Corporates: This is an innovative payroll solution for corporates and SMEs, which enables their employees to pay themselves via their mobile phones.

● Fidelity Insight: This online banking feature gives customers insight into their spending patterns to encourage saving and investment habits in Nigerians.

● NIP Limit Increase Indemnity for Corporate Customers: This feature allows corporate organizations to increase their NIP limit on Fidelity Online Banking after executing an indemnity online.

● Signed and Stamped Customer Account Statement: With this innovative feature, why visit the banking hall when it can come to you? Customers are enabled to access signed and stamped statements of accounts without having to visit the bank. This feature is accessible via Fidelity Online Banking (web or mobile).

● Fidelity Loan On Account Turnover (FLOAT): This service allows customers access loans against a consistent six months credit turnover on their account. Loan tenor is one month and is between N10, 000 and N100, 000.

● Fidelity PayGate: Fidelity PayGate is an online/web payment service that allows merchants to receive payments from their customers who purchase goods and services on their websites. This can be done using any card type (local and international cards) or via Pay by Link on social media platforms.

In addition, Fidelity Bank is driving the conversation with its award-winning virtual assistant, IVY. Due to her efficient and quick service delivery, Fidelity Bank’s IVY emerged as the “clear leader” of the rest of the chatbots in the 2020 KPMG Digital Channels Scorecard.

IVY claimed the prestigious title of ‘best chatbot of 2020′ by providing sophisticated and simple services such as complaint resolution, account opening, fast funds transfer, bill payment, transferring users to a live agent, loans, fixed deposit applications, and answering random questions.

All of this, and more, accentuate the bank’s current push to be number one in every market it serves. The success of their adopted digital culture is evident in the performance trend over the last few years and even sustained despite the impact of the pandemic.

Fidelity Bank continues to use technology to develop innovative products and services, all with the goal of providing Nigerians with seamless banking services that are fast, affordable, and convenient.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Banking Sector

FCMB Group Posts 22.1 Percent Decline in Profit in H1 2021

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FCMB - Investors King

FCMB Group Plc, a leading financial institution in Nigeria, recorded a 22.1 percent decline in profit after tax in the first half (H1) of 2021 despite zero COVID-19 restrictions.

The lender gross earnings dipped by 4.02 percent from N98.179 billion achieved in the first half of 2020 to N94.228 billion in the period under review, the bank disclosed in its unaudited financial statements seen by Investors King.

Net interest income also moderated by 5.25 percent from N45.379 billion reported in H1 2020 to N42.998 billion in H1 2021. While net fee and commission income increased to N12.934 billion in the period under review, representing an increase of 33.51 percent from N9.688 billion achieved in the same period of 2020.

Net trading income drop from N3.925 billion in H1 2020 to N2.639 billion in H1 2021, this represents a decline of 32.78 percent.

Other revenue sheds 39.7 percent from N7.555 billion in H1 2020 to N4.552 billion in H1 2021. Profit before minimum tax and income tax decreased by 24.2 percent to N8.911 billion in H1 2021, down from N11.071 billion recorded in H1 2020.

The bank paid N450 million as minimum tax and income tax of N903.797 million to push profit after tax down by 22.1 percent from N9.701 billion in H1 2020 to N7.557 billion in H1 2021.

The lender realised N974.744 million from foreign currency translation differences for foreign operations. This brings the total comprehensive income for the period N8.545 billion.

Earnings per share dipped from N0.49 H1 2020 to N0.38 in H1 2021.

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Banking Sector

Ecobank Grows Profit After Tax by 29 Percent to N62.6 Billion in H1 2021

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Ecobank - Investors King

Ecobank Transnational Incorporated, a leading lender in Nigeria and across Africa, grew gross earnings by 13 percent to N442.9 billion in the first six months ended June 30, 2021.

The bank disclosed in its unaudited financial statements released through the Nigerian Exchange Limited and seen by Investors King on Monday.

Revenue expanded by 15 percent to N334.9 billion in the period under review while operating profit before impairment charges rose by 33 percent to N138.3 billion.

The bank grew profit before tax to N85.3 billion in the first half of 2021, up by 33 percent when compared to N64.133 billion recorded in the same period of 2020.

Profit after tax increased by 29 percent to N62.6 billion, up from N48.535 billion recorded in the corresponding period of 2020. Total assets expanded by 6 percent to N11.022 trillion with loans and advances rising by 7 percent to N7.861 trillion.

However, total equity was down by 1 percent to N803.2 billion.

Speaking on the bank’s performance, Ade Ayeyemi, Ecobank Group CEO, said: “We saw continued and sustained resilience in our performance, which is indicative of the success of our ‘execution momentum’ drive. As a result, we generated a return on tangible equity of 16.1% versus 15.2% a year ago and increased diluted EPS and tangible book value per share by 19% and 6%, respectively. In addition, profit before tax increased 23% to $210 million.”

“Group revenues rose 7% to $825 million, despite the challenging operating environment with the third wave of coronavirus infections threatening economic recovery. Our diversified pan-African business model continued to rise to the challenge. Revenues grew 13% and 6% in our Commercial and Consumer businesses, while our focus on growing the trade business led to increased trade assets.

The slowly increasing business and spend activity drove a 20% rise in our Payments business’s revenue to $90 million. Deposits growth was strong, with total deposits now over $19 billion, an increase of $1.0 billion in the second quarter and $2.4 billion in a year, driven by our omnichannel strategy. Though loan growth remained
flat, we are focused on providing support to MSMEs for growth,” Ayeyemi added.

“I am proud of the team’s hard work in driving efficiency, which continues to reflect in our cost-to-income ratio of 58.7% ahead of guidance and progressing well toward our medium-term goal of approximately 55%. In addition, credit quality continued to be exceptionally strong. As a result, our NPL ratio of 7.4% is a substantial improvement from the prior year’s 9.8%, as we also build reserves to insulate the balance sheet with an NPL coverage ratio of 86.7% and pushing towards our nearterm target of 90%,” Ayeyemi continued.

“We successfully raised $350 million Tier 2 Sustainability Notes in June, the first-ever by a financial institution in sub-Saharan Africa and first to have a Basel III-compliant 10-year non-call 5 structure outside South Africa in 144A/RegS format. The Bond was 3.6 times oversubscribed, demonstrating strong confidence in the Ecobank Group and our commitment to the sustainability of our communities and their social needs. I am deeply grateful to all stakeholders and must thank our clients for continuing to put their trust in Ecobank for their diverse banking needs.” Ayeyemi concluded.

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Banking Sector

Vietnamese Prime Minister Moves on CBDC Amid Questions on Regional Nature of e-Yuan

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Vietnamese Prime Minister Pham Minh Chinh

This month, it was reported that Vietnamese Prime Minister Pham Minh Chinh asked, in Prime Minister’s Decision No 942/QD-TTg, the State Bank of Vietnam to study and execute a pilot implementation of a central bank digital currency before the end of 2023. Currently, cryptocurrencies are not legally recognized as an asset in the country, nor do any crypto exchanges hold licenses from the central bank. Last year, the country set up a group to study digital assets, with a purview that extended to potentially proposing regulatory mechanisms.

“Vietnam is a country that has had its eye on blockchain, even though they haven’t made many steps towards mainstreaming cryptocurrencies. It is a country that is interested in technology and riding a potential economic wave brought upon by new innovation, from blockchain to AI and VR. But, what’s notable here is that this decision was pushed forward very near the time that many pundits began to ask whether the Chinese e-Yuan would become a digital currency which transcended China and became something of a regional powerhouse as an asset,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

“I think that’s important. Many countries are looking at what’s happening in China, then taking a look at their own place in the CBDC rat race, and they’re making decisions, I think, which moves up their timetable. This isn’t an innovation where you want to be last to the party. Doing so, in fact, could have ripple effects across a country’s monetary policy,” noted Gardner.

“Digital money is an inevitable trend,” said Huynh Phuoc Nghia, Deputy Director of the Institute of Innovation under the University of Economics Ho Chi Minh City. Some believe that moving quickly to develop a CBDC could give countries like Vietnam greater influence in the global financial system.

“I think it’s too soon to say what kind of ripple effects this development will have. It’s worth noting that Vietnam is in the very early stages. This isn’t a case where they’re ready to begin a pilot test in the short-term. Vietnam isn’t Ghana. But, forging ahead now can only be a positive. It’s better to move forward than continue to wait. Those countries that continue to take a wait-and-see approach are going to find themselves in last place. This is a race you don’t want to finish last. It very well could be the 21st century equivalent to the Race to Space,” opined Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Over the past twenty years, the company has built technology for the world’s most notable exchanges, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“Vietnam is so close in proximity to China, and China is so far ahead in the development of their own CBDC, it was likely the push that they needed to move on this. Earlier this year, some pundits wondered if the e-Yuan would replace the dollar. That’s a premature discussion to have. But, if successfully rolled out, could it have a real regional impact? Absolutely,” Gardner offered.

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