Shareholders of Fidelity Bank Plc have expressed strong support for the bank’s ongoing recapitalization efforts, lauding its impressive performance over the years. The bank’s commitment to delivering significant dividends and capital gains has earned widespread approval from investors.
During a recent meeting, shareholders from various leading associations, including the Independent Shareholders Association of Nigeria (ISAN) and the Association for the Advancement of Rights of Nigerian Shareholders (AARNS), voiced their readiness to back any share offering by Fidelity Bank. They highlighted the bank’s resilience and investor-friendly approach, emphasizing its potential for above-average returns.
Fidelity Bank’s extensive retail shareholder base, consisting of nearly 400,000 investors, showcases its popularity and market confidence. Notably, no single shareholder holds more than 5% of the bank’s issued share capital, ensuring a highly diversified ownership structure. This broad base, while presenting challenges in corporate register management and stock volatility, underscores the bank’s pricing efficiency in the stock market.
The bank’s performance has been particularly noteworthy, with an average annual return of over 81% over the past five years. This impressive figure outperforms all major market indices, doubling the overall market’s average return and quadrupling that of the banking sector. Shareholders expressed optimism about the bank’s future, given its solid track record and growth potential.
ISAN National Coordinator, Mr. Moses Igbrude, praised Fidelity Bank for its organic growth and market niche service, urging the board to maintain good corporate governance to sustain this progress. Dr. Faruk Umar, President of AARNS, echoed these sentiments, commending the bank’s corporate governance structure and financial strength, as evidenced by its successful acquisition of Union Bank UK and consistent dividend payments.
Mrs. Bisi Bakare, National Coordinator of the Pragmatic Shareholders Association of Nigeria, highlighted the bank’s strong performance despite economic challenges. She cited the 2023 business year, where the bank’s pre-tax profit surged by 131.5% to N124.2 billion, driven by a 64.9% growth in gross earnings to N555.8 billion. Deposits and total assets also saw significant increases, reinforcing shareholder confidence.
The Progressive Shareholders Association of Nigeria’s National Coordinator, Mr. Boniface Okezie, described Fidelity Bank’s growth as “amazing,” noting its strong balance sheet and promising future returns. He emphasized the bank’s robust fundamentals, which make it an attractive investment option.
The bank’s interim report for the first quarter of 2024 showed continued strong performance, with gross earnings increasing by 89.9% to N192.1 billion. Profit before tax doubled to N39.5 billion, driven by broad-based growth across income lines and a higher yield environment. The bank’s total deposit rose by 17% to N4.7 trillion, and net loans and advances increased by 21% to N3.7 trillion.
Shareholders’ endorsements and the bank’s solid financial metrics indicate that Fidelity Bank is well-positioned to meet the Central Bank of Nigeria’s recapitalization requirements. The bank’s strategic initiatives and commitment to good corporate governance are expected to drive continued growth and value for investors.