Fidelity Bank Plc has continued to capture the attention and confidence of investors, recording an impressive average annual profit growth of 64% over the past three years. This consistent growth cements its status as one of Nigeria’s fastest-growing companies.
The bank has seen a significant expansion in both its customer base and assets. Its total balance sheet size surged from N2.1 trillion to N6.2 trillion, making it the sixth largest in the Nigerian banking industry. This growth is supported by a substantial total deposit of over N4 trillion, also ranking sixth in the industry.
A detailed analysis of Fidelity Bank’s audited reports and accounts from 2020 to 2023 reveals double-digit growth in earnings, profitability, and assets. The bank’s cumulative average annual growth rate (CAGR) in these areas significantly surpasses the industry average, showcasing its robust performance among publicly quoted companies.
An average annual profit growth rate of 64% highlights Fidelity Bank’s fundamental strength as an inflation-hedging investment. This operational growth bolsters the bank’s overall return outlook, with its share price delivering an average annual capital gain of more than 100% over the past five years in the stock market.
Industry experts have noted that Fidelity Bank’s strong historical performance is a key attraction for its ongoing combined rights and public offer. The bank is offering a rights issue of 3.2 billion ordinary shares of 50 kobo each at N9.25 per share, alongside a public offer of 10 billion ordinary shares of 50 kobo each at N9.75 per share. The acceptance and application lists for these offers, which opened on June 20, 2024, will close on July 29, 2024. The rights issue has been pre-allotted on the basis of one new ordinary share for every 10 existing ordinary shares held as of January 5, 2024.
Fidelity Bank’s gross earnings have risen from N206 billion in 2020 to N556 billion in 2023, reflecting an average annual growth rate of 39%. Profit before tax grew from N28 billion in 2020 to N124 billion in 2023, while profit after tax increased from N26.65 billion in 2020 to N99.45 billion in 2023. Earnings per share also grew from 92 kobo in 2020 to N3.11 in 2023, indicating potential for higher dividends to shareholders.
The bank’s growth is driven by an increase in market share, a commitment to supporting national economic growth, and high customer trust. Total assets have grown from N2.11 trillion in 2019 to N6.23 trillion in 2023, while shareholders’ funds have increased from N234.03 billion in 2019 to N437.31 billion in 2023. Total deposits have grown by an average annual rate of 33%, from N1.7 trillion in 2020 to N4.02 trillion in 2023, with low-cost deposits making up 97.4% of the total.
Low-cost deposits have risen at a CAGR of 44%, from N1.31 trillion in 2020 to N3.91 trillion in 2023. Savings accounts have also doubled from N424 billion in 2020 to N881 billion in 2023, with an average annual growth rate of 28%. Fidelity Bank serves over 8 million customers, with 5.1 million using digital channels, showcasing the bank’s strong ICT infrastructure.
The bank has also shown a strong commitment to national economic growth, with net loans growing at an average annual rate of 32%, from N1.32 trillion in 2020 to N3.09 trillion in 2023. This positions Fidelity Bank’s loan portfolio as the fifth largest in the Nigerian banking industry.
Dr. Kamoru Yusuf, Founder of KAM Holding and a customer of the bank, praised Fidelity Bank’s exceptional support for Nigerian businesses. He noted that investing in Fidelity Bank is an investment in the growth of the Nigerian economy and companies like KAM Holding.
Recent indications suggest that Fidelity Bank will maintain its impressive growth trajectory. The interim report for the first quarter ended March 31, 2024, showed that the bank started the year strong, with gross earnings increasing by 89.9% to N192.1 billion. Interest income rose by 90.7%, and non-interest income grew by 84%, driven by higher yield environments and strong earning assets. Profit before tax doubled by 120% to N39.5 billion compared to N17.9 billion in the first quarter of 2023. The bank’s market share expanded, with total deposits rising by 17% to N4.7 trillion within three months, and net loans and advances increasing by 21% to N3.7 trillion.
Fidelity Bank’s consistent strong growth continues to excite investors, reaffirming its position as a key player in the Nigerian banking industry.