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Fidelity Bank Plc announces a Profit before Tax (PBT) of N4.0 billion for the first quarter ended March 31, 2016

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Financial Highlights

§  Gross Earnings decreased by 5.5 % to N34.4bn from N36.4bn in Q1 2015

§  Net Interest Income increased by 30.0% to N16.1bn from N12.4bn in Q1 2015

§  Net Operating Income increased by 6.2% to N20.8bn from N19.6bn in Q1 2015

§  Total Expenses increased by 15.7% to N16.0bn from N13.9bn in Q1 2015

§  Profit before Tax declined by 14.6% to N4.0bn from N4.7bn in Q1 2015

§  Profit after Tax declined by 10.5% to N3.6bn from N4.0bn in Q1 2015

§  Net Loans increased by 2.1% to N590.1bn from N578.2bn in 2015 FY

§  Deposits increased by 1.9% to N784.5bn from N769.6bn in 2015 FY

§  Total Equity increased by 1.3% to N187.0bn from N183.5bn in 2015 FY

§  Total Assets increased by 4.0% to N1,284.2bn from N1,231.7bn in 2015 FY

N ’million

Q1 2016

Q1 2015

VAR

% VAR

 

Key Ratios

Q1 2016

2015FY

VAR

Gross Earnings

34,356

36,364

(2,009)

-5.5%

 

Earning Assets Yield

13.2%

13.8%

-0.5%

Net Interest Income

16,104

12,388

3,716

30.0%

 

Net interest Margin

7.3%

6.9%

0.4%

Net Fee Income

4,656

8,734

(4,077)

-46.7%

 

Return on Equity

7.8%

7.6%

0.3%

Net Operating Income

20,796

19,587

1,209

6.2%

 

Return on Assets

1.1%

1.1%

0.0%

Total Expenses

(16,031)

(13,857)

(2,174)

15.7%

 

Cost of Funds

5.2%

6.2%

-1.0%

Impairment Charge

(739)

(1,020)

281

-27.5%

 

Cost Income Ratio

77.1%

76.4%

0.7%

Profit before Tax

4,025

4,710

(685)

-14.6%

 

Cost of Risk

0.5%

1.0%

-0.5%

Profit after Tax

3,583

4,003

(421)

-10.5%

Loan to Deposit

75.2%

75.1%

0.1%

 

Q1 2016

2015 FY

VAR

% VAR

Liquidity Ratio

37.5%

36.0%

0.0%

Customer Deposits

784,549

769,636

14,913

1.9%

CAR

19.3%

18.7%

0.6%

Total Equity

187,029

183,516

513

1.3%

NPL Ratio

4.3%

4.4%

-0.1%

Net Loans

590,133

578,203

11,930

2.1%

BVPS (NGN)

6.4

6.3

1.8%

Total Assets

1,284,240

1,231,722

49,518

4.0%

EPS (NGN)

0.5

0.5

1.7%

 

Please note that the net operating income includes net gains/(losses) from financial instruments.

Our financial performance for the quarter is reflective of the continued slowdown in business activities; due to lower government revenues arising from depressed oil prices, lower interest rate regime and weaker macro-economic environment.

We continued to improve the earnings capacity of our balance sheet (fund based income) despite the decline in fee income. Though gross earnings declined by 5.5% (due to a N4.2 billion drop in our foreign exchange income), net interest income increased by 30.0%, e-banking income by 216% and net operating income by 6.2% respectively.

In line with our focus on balance sheet optimization, we ensured that the reduction in funding costs outpaced the decline on yields on earning assets. This improved our NIM to 7.3% from 6.9% in the 2015FY.

Though operating expenses increased by 15.7% YOY, expense growth was flat when compared with 2015FY quarterly annualized figures and actually declined by 24.1% from Q4 2015.

Our cost of risk remained within our guidance of 1.0% as we saw a decline of our risk asset portfolio in most sectors due to the weaker macro-economic indices, overall loan growth of 2.1% was basically driven by public sector on-lending facilities.

Our NPL ratio declined to 4.3% largely due to the growth in the loan book while our regulatory ratios remained well above the set thresholds, our capital adequacy ratio at 19.3% gives us ample leverage to take advantage of emerging business opportunities.

Total deposits increased by 1.9% and the disciplined execution of our retail strategy continued to deliver strong results as savings deposits grew by 13.4% in the quarter under review.

Our key objectives for the 2016FY remains; redesigning our systems and processes to enhance service delivery, cost optimization initiatives to reduce expenses by 5%, proactive risk management, increased customer adoption/migration to our digital platforms and increasing our retail banking market share.

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