Fidelity Bank, a tier-two financial institution in Nigeria, announced a remarkable 159% increase in after-tax profit for the first half of 2024. The bank's profit surged to N159.8 billion, up from N61.9 billion in the same period last year, as disclosed in its financial statement released on the Nigerian Exchange Group.
The bank's gross profits also experienced a significant rise, climbing 107% from N247.1 billion to N512.8 billion. This growth is attributed to the recent repricing of apex bank assets and the prevailing high interest rate environment resulting from monetary policy rate hikes.
To combat inflation and stabilize the currency, the Central Bank of Nigeria (CBN) raised interest rates from 18.75% to 27.25% between July 2023 and September 2024. Consequently, Fidelity Bank's interest income soared by 91%, reaching N363.9 billion, with N286 billion derived from customer loans and advances.
Interest expenditure also rose by 1%, totaling N146.8 billion, primarily due to a 51% increase in term deposit interest and a 153% rise in interest on issued debt and borrowed funds. Operating expenses surged by 100.7% to N128.5 billion, driven by rising inflation and disruptions in energy supply.
However, net foreign exchange profits plummeted by 844%, falling from N32.1 billion to N3.4 billion, which contributed to a decline in other operating income from N33 billion to N4.5 billion.
Despite these challenges, Fidelity Bank's core operations remain robust, with net cash flow from operating activities increasing to N1.01 trillion, up from N269 billion in the same period last year. The bank's net cash flow from investing activities was negative N617.2 billion, a decline from negative N102 billion, while financial activities saw an increase from N9.1 billion to N13.7 billion.
Fidelity Bank's basic earnings per share rose from N193.73 to N499.48. Additionally, the bank has initiated a N127.2 billion combined rights and public offer, marking its first capital raising effort under the CBN's banking recapitalization mandate.