When the management of the Nigerian Exchange Limited (NGX) in July 2023 announced that it was reclassifying Fidelity Bank Plc from small-price stock to medium-price stock, financial analysts concluded that the road to attaining Tier1 status by the bank is closer than ever imagined.

In full year 2022. Fidelity Bank briefly fell into the Tier 1 category and saw the highest gross earnings of N337.10 billion and profit before tax of N53.68 billion. The bank’s higher interest income relative to interest expense led to a net interest margin of 7.70 per cent, ahead of other similar banks.

Regarding its financial position, the bank had the highest total assets at N3.99 trillion in 2022. The bank’s relatively low-risk asset exposure kept non-performing loans (NPLs) at 2.90 per cent, the second lowest in the Tier 2 category ahead of Wema Bank.

Although the group has struggled with curtailing operating costs with CIR above 50 per cent, Fidelity earned the second lowest CIR among Tier 2 banks at 59.00 per cent, slightly behind FCMB at 53.90 per cent in FY 2022.

In 9M 2023, Fidelity Bank, according to Proshare analysts will rise to full Tier 1 status in its next Tier 1 Banking Sector Report review based on Proshare’s Banking Strength Index (PBSI)) led second-tier banks in gross earnings, profitability, total assets, customer deposits, and loans and advances.
However, its non-performing loan ratio (NPLR) rose to 3.54 per cent after Wema Bank’s 2.50 per cent, while its cost-to-income ratio (CIR) settled at 49.86 per cent, which was an improvement from the previous year’s ratio.

Significantly, in its full-year 2023 results, the bank’s total assets as of December 31, 2023 has risen to N6.2 trillion.

The bank closed 2023 as the fifth best banking stock on the floor of the NGX with a share price of N10.85 and a market capitalization of N347.3 billion, depicting an annual gain of 149.4 per cent, Fidelity Bank also showcased a commendable financial performance.
Notably, it achieved a net income of N91.8 billion in the nine months ending September 2023, reflecting a substantial 162.46% year-on-year growth from the corresponding period in 2022.

Furthermore, the bank registered an impressive return on equity of 28.48 per cent during the first nine months of 2023.

The 2023 performance of the bank was similar to that of 2022 as it was one of the three banks that led the list of the best-performing banks on the NGX. The other banks are FCMB and FBN Holdings.

The research pours into the performance of thirteen of Nigeria’s largest commercial banks analyzing improvement year on year over two quarters.

The analysis revealed that the thirteen banks raked in a sum of N298.84 billion as post-tax profit between July and September 2022, representing an increase of 29.9 per cent compared to N228.54 billion recorded in the corresponding period of 2021.

The commercial banks remained resilient despite economic headwinds, which saw the nation’s aggregate GDP growth slowed to 2.25 per cent in Q3 2022 from 3.54 per cent recorded in the previous quarter and 4.03 per cent in the corresponding period of 2021.

Also, banks’ loans to customers grew by 5.5 per cent between June and September 2022 to stand at N23.76 trillion, representing a net new loan of N1.23 trillion in three months. However, this showed a slightly slower growth than the 6.81 per cent increase recorded in the comparable period of 2021.

NGX reclassification

The NGX said the reclassification became necessary because Fidelity Bank shares have been trading above the N5.00 mark since February 2023.
According to the NGX, rule 15.29 of the Rulebook of the Exchange, 2015 (Dealing Members’ Rules) notes that equities priced above N5 per share for at least four of the most recent six months of trading, or new security listings priced above N5 per share at the time of listing on NGX are classified as medium price stock.

“Fidelity Bank traded above the N5.00 mark on February 20, 2023 and has remained above the N5 mark up until close of business on 30 June 2023.
“This indicates that Fidelity Bank has been trading above N5 for at least four months in the last six months. Therefore, it should be reclassified from small price stock to medium price stock,” it pointed out.

The bank has continued to post commendable financial performance every quarter as it cements its position amongst tier-one banks in the country.
In the half-year 2023 results and for the second year running, the bank emerged as the company with the highest earnings per share on the Nigerian Exchange Limited (NGX).

According to a report, Fidelity Bank, Seplat Energy, Total Energies, Okomu Oil, Presco, Dangote Cement, MTN Nigeria, BUA Foods, First City Monument Bank (FCMB) and Geregu Power emerged as the companies with the highest earnings per share within that review period.
Earnings per share (EPS) is a company’s net profit divided by the number of common shares it has outstanding.
It also indicates how much money a company makes for each share of its stock and is a widely used metric for estimating corporate value.

A higher EPS indicates greater value because investors will pay more for a company’s shares if they think the company has higher profits relative to its share price.

Fidelity Bank recorded an earnings per share of N184 in the first half of 2023 from N79 in the first half of 2022.
The share price of the bank as of Thursday, April 25, 2024, stood at N9.00 per share as the bank traded 12.642 million shares valued at N112.071 billion in 246 deals.

Fidelity Bank’s share price movement has shown intense volatility in an upward direction over the past years. The stock price has risen from N2.52 on January 04, 2010, to N10.00 on March 15, 2023, generating a YTD return of 297 per cent.

The bank’s market capitalization as of Thursday, April 25, 2024, stood at N288.11 billion. Average volume stood at 11.76 million, share outstanding was 32.01 billion while free float was 31.72 billion

Fidelity Bank

Analysts believe the bank’s share price underlines its earnings growth and financial performance as higher dividend yields and future earnings forecasts have triggered demand in the money lender’s shares.

Over the last ten years, the bank’s share price has risen to a resistance (highest price) of N14.20 on March 05, 2024, and a support price (lowest price) of N0.76 on November 16, 2016.

According to a Lagos-based stockbroker, ‘Fidelity Bank demonstrates the classical admonition to prospective investors of entering low and selling high. Over the last eight years, Fidelity’s stock price has risen by 44.19 per cent on a compound annual basis; very few stocks could prove a better inflation hedge”.

Ambrose Omordion, Ambrose Omordion, Chief Research Officer at Investdata Consulting Limited, believes that this is the best time for Fidelity as the bank’s share price is doing well among its peers.

He said, “Fidelity is doing well and its share price is one of the best among its peers. This is so because the bank has recorded impressive results in its 2023 financial year. In June 2023, the bank shares rose by 32 per cent making it the nation’s best-performing bank share as of half year (June 30).

“I can only see a better bank now and in the future. The bank is a potential Tier 1 bank and the performance of the bank is a pointer to the fact that the bank will scale the recapitalisation hurdle of the Central Bank of Nigeria (CBN)”.

Prince Anthony Omojola, National Coordinator, Independent Shareholders Association of Nigeria (ISAN), asserted that “Fidelity Bank is moving up in terms of performance. They have joined those paying interim dividends and they have also dipped their hand into big money tills for huge investment. They have borrowed big to be able to handle bigger contracts and be able to reap big. The reclassification is welcomed and I hope they will not disappoint us. If they can meet expectations, the benefit will be for Nigeria”.

On his part, Sam Ndata, Doyen of Nigerian Stockbrokers and non-executive director at UIDC Securities Limited commented, “This is a good development. If a company performs well, it will surely be rewarded to earn investors’ confidence”.

Mr Boniface Okezie, the National Coordinator, Progressive Shareholders Association of Nigeria, commented, “Fidelity Bank has paid its dues in the financial services sector. It has contributed immensely to the development of the small and medium enterprises (SME) sector yet pays dividends to the shareholders. Last year, it took the market by surprise by declaring a dividend of 50k per share which had not happened in previous years. The massive investment in ICT and effective branch network shows it is ready to serve the customers in a better way and make the shareholders happy.”

. Celebrates Airline For The Commencement of the Lagos-London Route

Fidelity Bank Plc has commended Air Peace’s performance since it commenced flight operations about 10 years ago.

Dr. Nneka Onyeali-Ikpe, the Managing Director, Fidelity Bank Plc gave the commendation over the weekend in Lagos during a special event organised for the airline by the bank to celebrate Air Peace for the milestone of commencement of direct flights from Lagos to London.

According to Nneka Onyeali-Ikpe, who doubled as the host at the event, the airline has upheld the principles of financial discipline and good corporate governance since inception, while it has also been very loyal to the bank.

She expressed delight that the bank had the airline as one of its major clients since inception, stressing that the Bank was celebrating the airline’s milestone of launching direct flight service to London and other developments it would attain in the future.

L – R: Vice Chairman, Air Peace, Mrs. Alice Onyema; Chairman, Air Peace, Dr Allen Onyema;
Managing Director/Chief Executive Officer, Fidelity Bank Plc, Dr Nneka Onyeali-Ikpe; and Managing Director, Graviti Hill Ltd, Dr Ken Onyeali Ikpe at a special event organised by the bank to celebrate the commencement of Air Peace’s flight operations into London recently.

The event, which held at the Civic Center, Victoria Island, Lagos, had in attendance several bank Managing Directors, stakeholders in the aviation sector, media personalities and well-wishers of both brands.

Speaking at the event, an elated Dr. Allen Onyema, the Chairman, Air Peace, observed that it was not rosy for the airline to attain its status and expressed gratitude to the flying public, the various aviation stakeholders, the media and the government for the continued support since it launched in 2014.

He specifically acknowledged the pivotal role played by Engr. Ben Adeyileka, the former Acting Director-General, Nigeria Civil Aviation Authority (NCAA), in helping the airline secure its Airline Operator Certificate (AOC).

He further commended Fidelity Bank for the consistent support and stressed that the bank had contributed to the success story of the airline.

“I call it our journey with Fidelity Bank. I did not envisage this day would come when an indigenous institution would be celebrating another indigenous institution. Fidelity supports real business. They keep removing people from the streets of poverty. Let other banks emulate Fidelity,” he said.

He reiterated that Air Peace was set up primarily to create employment, not for profitmaking, stressing that the motivation behind the business was to empower Nigerians economically.

“Air Peace was not borne out of the intent to profiteer, but to create jobs. Air Peace was not established because I wanted more money but because of the conviction that running an airline would create massive job opportunities. That was why we went into aviation”, he remarked.

He restated the airline’s belief in the Nigerian project, maintaining that supporting the airline meant supporting the growth of the Nigerian economy.

Onyema further craved for the support of all Nigerians on the Lagos-London route, which it opened on March 30, 2024.

He explained that the airline needed to sustain the route, stressing that this could only be done through support from Nigerians.

He said: “For every penny you pay to Air Peace, you pay to sustain the jobs of thousands of Nigerians and support economic growth.

“Air Peace flies you from any of our domestic routes to London. So, you can fly from Yola to London via Lagos. From the local airport, you are taken to the international airport free of charge with a seamless luggage transfer.”

He pledged that the airline would continue to fully adhere to the standard of safety and lauded the management and staff of Air Peace for their efforts in realising the London dream.

A letter of resignation seen by this online medium indicates Dr. Adesola Adeduntan has resigned from his position as Managing Director of First Bank Ltd.

Reliable sources familiar with the matter also confirmed this to Nairametrics, corroborating other media reports suggesting the same.

An official disclosure has yet to be filed with the Nigerian Exchange Group (NGX) as of Friday evening, when Nairametrics received the information.

According to our sources, Adedutan tendered his resignation to the board of the holding company of the bank, and it was accepted. He also communicated an effective resignation date of April 20, 2024.

Adedutan’s Resignation

In letter seen by Nairametrics, Adeduntan stated that “he would no longer be eligible for employment” of the bank after serving for a record nine years.

“As you are aware, my contract would be expiring on 31 December 2024 after which I would no longer be eligible for employment within the Bank having served as the Managing Director/Chief Executive Officer of FirstBank for a record time of nine years.”

“During this period the Bank and its subsidiaries has undergone significant changes and broken new grounds. We have repositioned the institution as an enviable financial giant in Africa.”

“I have however decided to proceed on retirement with effect from 20 April 2024 to pursue other interests.”

“I am eternally grateful to the board of directors of FirstBank and FBN Holdings Plc for the support that I received from them during my stewardship. I wish our iconic institution continue success and progress as we move into the next phase of its evolution.

New FBNH

The resignation also follows the recent appointments of 5 new elite directors at the holdco and bank levels, a move seen as an attempt to strengthen the corporate governance framework of the bank.

The directors appointed by the bank all have intimidating resume’s suggesting a new direction for one of Nigeria’s largest financial institutions.

The holding company announced the appointment of Mr. Olusola Adeeyo, and Mr. Viswanathan Shankar as Non-Executive Directors of FBN Holdings Plc respectively.

The bank (a subsidiary of the HoldCo) also appointed Mrs. Remilekun Adetola Odunlami as Non-Executive Director and Mr. Anil Dua and Mrs Fatima Ibrahim Ali as Independent Non-Executive Directors of FirstBank.

Throughout his tenure, previously reported by Nairametrics, Adedutan played a pivotal role in navigating the bank through challenging economic periods, focusing on digital transformation initiatives and strengthening the bank’s market position.

His tenure was controversially renewed in April 2021 for a second term, following an initial six-year term. This April marks the end of another three-year term at the helm of the bank for Adedutan, adhering to First Bank’s tradition of MD/CEOs serving three-year tenures, of which Adedutan has now completed two.

His departure marks a significant shift in the bank’s leadership dynamics as it approaches a critical juncture in its strategic development.

This story is still unfolding. Please check back for updates as we continue to gather more details.

Meanwhile an Extra-ordinary General Meeting planned for April 30th, 2024, to consider the bank’s planned N300 billion capital raise, has been cancelled. This was communicated in a notification on the NGX.