Fidelity Bank Struggles Post-Covid-19, Profit Declined by 20 Percent in Q3 2021

Nigeria’s leading tier-II bank, Fidelity Bank Plc, is yet to shave off COVID-19 impacts as Profit After Tax declined by 20.8 percent in the third quarter (Q3) ended September 30, 2021.

Despite the lender growing revenue by 25.9 percent to N62.051 billion in the third quarter, the surge in interest expense by 85 percent from N18.167 billion recorded in the same quarter of 2020 to N33.463 billion in the quarter under review dragged on the company’s net interest income to N14.659 billion, representing a decline of 45 percent from N26.680 billion achieved in Q3 2020.

The bank disclosed in its unaudited financial statements accessed by Investors King.

As expected, net interest income after credit loss (expense)/reversal declined by 38.2 percent to N14.510 billion, down from N23.485 billion achieved in the same period of 2020.

Fee and commission income, however, rose to N9.035 billion in the quarter, up from N4.955 billion in Q3 2020. Personnel expenses remained largely unchanged at N6.453 billion, almost the same as N6.430 billion filed in Q3 2020.

Therefore, profit before tax expense declined by 20.9 percent from N9.385 billion in Q3 2020 to N7.423 billion in the quarter under review. Fidelity bank paid N217 million in income tax in the third quarter.

Profit after tax declined by 20.8 percent to N7.206 billion from N9.102 billion posted in the corresponding quarter. Similarly, earnings per share dipped to 25 kobo from 31 kobo.

Commenting on the bank’s performance in the first half (H1) of the year, Mrs. Nneka Onyeali-Ikpe, MD/CEO of Fidelity Bank Plc said, “We look forward to sustaining the current momentum in H2 2021 by optimizing our balance sheet and lowering our cost – to – serve which will translate to improved earnings while we remain committed to our medium to long-term strategic objectives.”

In reference to the bank’s positive performance in H1 2021, she said “We sustained our impressive financial performance with double-digit growth in profit as increased customer transactions drove non-interest revenue while improved operational efficiency continued to moderate cost – to – serve. This resulted in 72.4percent increase in profit before tax to N20.6bn from N12.0bn in H1 2020.”