Fidelity Bank Plc has reported a profit before
tax (PBT) of N9.8 billion for the nine months ended September 30, 2016, showing
a decline of 28.7 per cent from the N13.8 billion recorded in the corresponding
period of 2015.
Similarly, profit after tax (PAT) fell from
N11.445 billion to N8.753 billion.
However, the bank reported gross earnings of N110.3 billion, showing a marginal increase of three per cent from N107 in the period under review.
However, the bank reported gross earnings of N110.3 billion, showing a marginal increase of three per cent from N107 in the period under review.
Its deposit base also grew by 3.4 per cent to
N795.6 billion, from N769.6 billion.
Commenting on the financial results, the Managing Director/Chief Executive
Officer of the Bank, Nnamdi Okonkwo said the bank’s performance was indeed
reflective of the recessionary environment characterised by lower government
revenues, rising inflation, lower consumer disposable income, significantly
tougher operating environment in all sectors and the impact of these headwinds
on asset quality and foreign trade transactions.
“We continued with the disciplined execution of our medium term strategy and
recorded decent growth on some key operational metrics while moderating the
impact of the headwinds above on other financial indices,” he said.
Explaining the decline in
PBT, Okonkwo said: “PBT declined largely due to “a 102.0 per cent year-on-year
(YoY) growth in impairment charge (N4.0 billion) driven significantly by
increased provisions made in the second quarter (Q2) and third quarter (Q3) of
2016 (N4.1 billion and N3.2 billion respectively) due to the impact of the
devaluation of the local currency (naira) on our trade finance portfolio and
some critical sectors affected by the weaker macroeconomic indices.”
He added that a 95.7 per
cent (N1.3 billion) decline in dividend income on equity investments as well as
a 8.9 per cent growth in operating expense were also responsible for the
decline in profit.
According to him, growth
in operating expenses was driven essentially by increased technology and advert
costs.
“The interest income
growth was largely driven by 25.6 per cent (N5.4 billion) growth in interest
income on loans while interest income on Liquid assets increased by 13.5 per
cent (N0.9 billion) for the quarter”, Okonkwo said.
Okonkwo noted that the
bank has continued to take a very prudent view of the impact of the currency
devaluation, tougher operating environment and declining consumer disposable
income on selected sectors of its loan portfolio.
“We are still focused on
keeping our non-performing loan (NPL) ratio below 5.0 percent in this very
challenging operating environment. Our other regulatory ratios (Liquidity Ratio
/ CAR) remained above the set thresholds, though Capital Adequacy Ratio
improved from 16.4 percent in Q2 2016 to 16.8 per cent in Q3, 2016, we expect
CAR to revert to 18 percent+ once we adjust for the excess non-distributable
reserves (N23bn) in our 2016FY audited accounts,” he said.
..Thisday
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