Fidelity Bank guns for tier-1 ranking
AMIDST pressures in the banking sector arising from some adverse macroeconomic environment, Fidelity Bank Plc appears set to join the class of tier-1 banks.
The tier-1 banks in Nigeria include United Bank for Africa Plc, Zenith Bank Plc, Guaranty Trust Bank Plc, Access Bank Plc and First Bank of Nigeria Plc. They are categorized by their balance sheet size.
Fidelity Bank has successfully risen to the leadership position amongst tier-2 banks with its robust performance in the 2017 financial year (FY17) and the first quarter 2018, (Q1’18) but the Managing Director, Mr Nnamdi Okonkwo, told some financial journalists yesterday that the bank has just finished its four-year strategic growth plan which would usher it into tier-1 group upon successful implementation.
He said the growth strategy may be in a combination of organic and in-organic, explaining that if the opportunity presents for acquisition of other entities the bank would do that.
On the implication of the growth plan on its capital adequacy, he said though the bank is presently adequately capitalized at over 16 percent ratio despite the application of the International Financial Reporting Standard, IFRS-9, with stress tests, if any opportunity presents itself requiring additional capital for expansion the bank would go to the capital market. In the recently released Q1’18 results Fidelity Bank savings deposits kept to its plan for the 5th consecutive year of double digit growth. Okonkwo said the bank is now heavily and efficiently run on digital platforms.
As at Q1’18 the debit card penetration was about 50 percent and 37 percent of customers now self enrolled on mobile/internet banking products. About 79 percent of customers’ transactions are now done on electronic channels with a target to exceed 80 percent in the 2018FY.
Cash holding has declined by over 30 percent in the last 15months on increased digital traction. The bank also showed further earnings capacity in the Q1’18 financials with total Interest Income rising by 6.2 percent to N38.5 billion while Cost-to-income Ratio inched up to 72.7 percent.