Banking Sector

Fidelity Bank Sets N60m Compensation for Chairman, N40m for Non-Executive Directors

Published

4 weeks ago

May 22, 2024

Fidelity Bank’s shareholders have approved a substantial compensation package for its chairman and non-executive directors.

The decision, disclosed in a document filed with the Nigeria Exchange Group titled ‘Resolutions from the 36th annual general meeting on Monday,’ outlines the bank’s plans for remuneration for the fiscal year 2024.

According to the resolution, Fidelity Bank’s chairman is set to receive a compensation package of N60 million annually.

Also, each non-executive director is slated to earn N40 million per annum.

The resolution further stipulates that these compensation figures will remain in effect for succeeding years until reviewed by the company during its annual general meeting.

This provision underscores the bank’s commitment to regular evaluation and adjustment of its compensation policies to align with evolving market dynamics and shareholder expectations.

The decision comes amidst Fidelity Bank’s proposal for a final dividend payout of 60 kobo per share to shareholders for the 2023 financial year.

This announcement reflects the bank’s robust financial performance and its commitment to delivering value to shareholders.

Fidelity Bank’s financial report for the year 2023 reveals impressive growth, with profit before income tax soaring by 131.49% to N124.26 billion from N53.68 billion in 2022.

This remarkable performance underscores the bank’s resilience and agility in navigating challenging economic conditions while capitalizing on emerging opportunities in the financial sector.

While the decision to allocate such substantial compensation packages to its leadership team may raise eyebrows among some stakeholders, proponents argue that it is essential to attract and retain top talent in a competitive industry landscape.

They contend that adequately remunerating key personnel is crucial for driving sustainable growth, fostering innovation, and maintaining stakeholder confidence.

However, critics may question the optics of such generous compensation packages, particularly in light of the broader socioeconomic challenges facing the country. With concerns over income inequality and calls for greater corporate accountability, Fidelity Bank may face scrutiny over its executive compensation practices and their alignment with broader societal interests.

As Fidelity Bank forges ahead with its ambitious growth agenda, navigating the delicate balance between rewarding leadership and addressing stakeholder concerns will remain a key priority for the institution.

As the banking industry continues to evolve, ensuring transparency, accountability, and fairness in compensation practices will be essential for maintaining trust and credibility in the eyes of shareholders and the public alike.

Up Next

CBN Reports 136% Increase in Q1 Forex Inflows Over 2023 Total

Don't Miss

Financial Institutions Racked Up N678m in Fines Last Year

Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Comments

Banking Sector

Fidelity Bank Launches N127.1bn Public Offer and Rights Issue on June 20

Published

2 days ago

June 14, 2024

Samed Olukoya

Fidelity Bank Plc, Nigeria’s sixth-largest bank, is set to open its public offer and rights issue to investors on Thursday, June 20, 2024.

In preparation for this significant financial event, Fidelity Bank will host a “Facts Behind the Offer” presentation at the Nigerian Exchange Group (NGX) on the same day.

This presentation is expected to provide detailed insights into the bank’s strategy and the opportunities presented by the public offer and rights issue.

Under the rights issue, Fidelity Bank will offer 3.2 billion ordinary shares of 50 kobo each at N9.25 per share. These shares will be available to existing shareholders in the proportion of 1 new ordinary share for every 10 ordinary shares held as of January 5, 2024.

In addition to the rights issue, the bank will also offer 10 billion ordinary shares of 50 kobo each to the general investing public at N9.75 per share. This dual approach is part of the bank’s comprehensive strategy to raise a total of up to N127.1 billion.

The acceptance and application period for the rights issue and public offer will commence on Thursday, June 20, and close on Monday, July 29, 2024.

This timeline provides investors ample opportunity to participate in the bank’s capital expansion.

Fidelity Bank has engaged Stanbic IBTC Capital as the lead issuing house for the combined offer. The joint issuing houses include Iron Global Markets Limited, Cowry Asset Management Limited, Afrinvest Capital Limited, FSL Securities Limited, Futureview Financial Services Limited, Iroko Capital Market Advisory Limited, Kairos Capital Limited, and Planet Capital Limited.

These firms will play a crucial role in managing the offer and ensuring its success.

The bank’s initiative to raise N127.1 billion is seen as a strategic move to bolster its capital base and ensure compliance with the CBN’s revised capital requirements, which were introduced on March 28, 2024.

This capital raise is expected to enhance the bank’s capacity to support its growing customer base and expand its operations across Nigeria and beyond.

In recent years, Fidelity Bank has demonstrated robust financial performance and growth, positioning itself as a key player in Nigeria’s banking sector.

The successful completion of this public offer and rights issue will further solidify its standing and enable it to pursue new opportunities in the competitive financial landscape.

Investors and stakeholders are keenly anticipating the outcome of this capital-raising exercise, which is poised to mark a significant milestone in Fidelity Bank’s journey toward sustained growth and stability.

Banking Sector

Fidelity Bank Plc Promotes 11% of Staff Following Record Financial Performance

Published

2 days ago

June 14, 2024

Samed Olukoya

Leading financial institution, Fidelity Bank Plc has announced the promotion of 11% of its workforce, a testament to the exceptional performance and dedication of its employees.

This significant move follows the release of the bank’s 2023 full year Audited Financial Statements, which reported an impressive 131.5 percent growth in Profit Before Tax (PBT) to N124.26 billion.

The recent promotions span every level within the bank, reflecting Fidelity Bank Plc’s commitment to recognizing and rewarding excellence across its entire organization.

This strategic initiative has garnered positive reactions from staff members, who see it as a validation of their hard work and contribution to the bank’s remarkable financial achievements.

In addition to the promotions, Fidelity Bank Plc has also concluded arrangements to raise a total of N127.1 billion through a Rights Issue to existing shareholders and a Public Offer. This move is part of the bank’s broader strategy to strengthen its capital base, support future growth, and enhance shareholder value.

Fidelity Bank Plc’s impressive financial performance and the subsequent employee promotions highlight the bank’s robust operational strategy and its commitment to fostering a rewarding work environment. By investing in its people and ensuring their career growth, the bank continues to build a motivated and high-performing workforce.

Ranked as one of the best banks in Nigeria, Fidelity Bank Plc is a full-fledged customer commercial bank with over 8.5 million customers serviced across its 251 business offices in Nigeria and the United Kingdom as well as on digital banking channels.

The bank has won multiple local and international awards including the Export Finance Bank of the Year at the 2023 BusinessDay Banks and Other Financial Institutions (BAFI) Awards, the Best Payment Solution Provider Nigeria 2023 and Best SME Bank Nigeria 2022 by the Global Banking and Finance Awards; Best Bank for SMEs in Nigeria by the Euromoney Awards for Excellence 2023; and Best Domestic Private Bank in Nigeria by the Euromoney Global Private Banking Awards 2023.

Banking Sector

A Failed Attempt to Trigger a Run on Banks

Published

3 days ago

June 13, 2024

Samed Olukoya

As market sentiment remains highly volatile and driven by news flow, banks liquidity levels can become vulnerable due to spread of inaccurate information.

As Nigerian banks put finishing touches to their recapitalisation plans as directed by the Central Bank of Nigeria (CBN), industry watchers have seen how social media mercenaries and their hirelings are deliberating distorting the truth and pushing campaigns that spread false information which could result in deposit outflows from their targeted banks.

Earlier this month when the Central Bank of Nigeria (CBN) revoked the banking licence of Heritage Bank, it gave reasons for the decision.

The reason was clearly stated! “This action has become necessary due to the bank’s breach of Section 12 (1) of BOFIA, 2020. The Board and Management of the bank have not been able to improve the bank’s financial performance, a situation which constitutes a threat to financial stability,” CBN noted.

The CBN said Heritage Bank had continued to suffer and had no reasonable prospects of recovery, thereby making the revocation of the license the next necessary step.

A statement by Hakama Sidi Ali, acting Director, Corporate Communications of the CBN, said the apex bank acted in accordance with its mandate to promote a sound financial system in Nigeria and in exercise of its powers under Section 12 of the Banks and Other Financial Act, BOFIA, 2020.

Many market watchers, particularly those following developments in the banking industry did not think the CBN should have done otherwise and subsequent appointment of the Nigeria Deposit Insurance Corporation, NDIC, as the liquidator.

Mischievous ‘list’ of other banks

Shortly after the apex bank hammer fell on Heritage Bank, social media mischief makers released their own ‘list’ of other banks they felt will go the Heritage way – not minding the illegality of assuming such a regulatory position.

Thanks to Central Bank of Nigeria (CBN) for quickly debunking the fake news which had mentioned the names of other banks – Fidelity Bank, Wema Bank, Polaris Bank and Unity Bank.

“The attention of the Central Bank of Nigeria (CBN) has been drawn to some information circulating in the public domain, suggesting that the CBN is set to revoke the licenses of three additional banks following its regulatory action against Heritage Bank Plc on Monday, June 3, 2024.

“The CBN unequivocally states that these allegations are false and intended to trigger panic in the financial system. The Nigerian financial system remains safe, sound, and resilient. Our banks have begun submitting implementation plans for the Banking Sector Recapitalisation Programme in compliance with the CBN Circular reviewing the minimum capital requirements for Commercial, Merchant, and Non-Interest Banks (CMNIBs).

“These plans are currently being reviewed by the Bank. In addition to enhancing buffers to withstand economic shocks, this proactive measure by the CBN to require CMNIBs to recapitalise will result in increased capital for Nigeria’s banks, enabling them to provide much-needed credit to critical sectors of the economy. This will increase the financial system’s contribution to the growth and development of a $1 trillion Nigerian economy.

“The CBN would like to reassure all stakeholders of its unwavering commitment to ensuring the financial system’s stability. Our financial system remains on a solid footing, and the CBN will continue to take all necessary steps to maintain its safety and soundness,” said CBN’s Sidi Ali said in a June 4 statement in response to the false allegations of license withdrawals.