Savings deposits, digital banking boom as Fidelity Bank declares N20bn profit

Fidelity Bank has announced a seven percent growth in profit after tax from N19 billion to N20.4 billion.

According to the 2020 third-quarter results released by the bank on the Nigerian Stock Exchange, profit before tax closed at N21.3 billion

Customer deposits, net loans and total assets all recorded double-digit growth.

Total assets grew by 21 percent from N2.1 trillion in 2019 to N2.5 trillion; customer deposits were up by 22.3 percent from N1.23trillion to N1.5trillion and net loans rose by 12 percent from N1.12 trillion to N1.27 trillion.

However, gross earnings dropped marginally by 3.7 percent from N161.1 billion in 2019 to N155 billion.

“Our nine months results reflect our resilient business model, particularly in a very challenging operating environment. We worked closely with our customers to gradually recover from the economic impact of the pandemic and the attendant effect of the lockdown,” Nnamdi Okonkwo, the Fidelity Bank chief executive officer, said.

Okonkwo explained that the drop in gross earnings was due to the decline in interest and similar income caused by lower yields and a drop in fee income.

“Net fee income declined by N1.3 billion largely due to a reduction in FX related income on account of the revaluation gains recorded in H1 2020.

“Digital banking, however, continued to gain traction as we now have 52.3 percent of our customers enrolled on the mobile/internet banking products from 47.4 percent in 2019FY and 88.2 percent of customer-induced transactions are done on digital platforms.

“Similarly, digital banking income increased by 20.0 percent quarter on quarter due to improved adoption by customers and new services migrated to our digital channels.

“The growth in savings deposits accounted for 40.2 percent of the total growth in customer deposits and savings dDeposits now represent 25.7 percent of total deposits, up from 22.3 percent in 2019.”

According to Okonkwo, the bank has disbursed over N50 billion in intervention funds to customers in the last three months in critical sectors to kick-start the economy after the lockdown.

He also expressed optimism that the bank would finish the year strong.