Stock & Analyst Updates | |
Stock & Analyst Updates | |
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Thursday, September 27,
2018 / 04:37
PM / CardinalStone Research
Fidelity Bank Plc (FIDELITYBK) H1’18 results – Gross earnings rose by 3.6% YoY to N88.9 billion, in line with our estimate of N86.5 billion (+2.8% deviation). More remarkably, after tax profit leapt by 31.1% YoY to N11.8 billion, ahead of our N9.4 billion projection (+26.1% deviation). On a quarterly basis, PAT improved by 56.0% QoQ to N7.2 billion thanks to an impressive 252.9% QoQ growth in non-interest income.
Other highlights
Analyst take:
Overall, we like FIDELITYBK’s H1’18 performance notably the significant improvement in non-interest revenue during the quarter. More so, the bank was able to grow loans (+3.5%) in contrast to peers, which consequently led to the increase in credit related fees.
However, we would like to see this loan growth translate positively for interest income in H2’18. We are also impressed with the improvement in credit quality, evidenced by the decline in cost of risk and NPL ratios. Though cost to income appears relatively stable at 67.7%, we believe that the bank has room to bring this number down through enhanced operational efficiency.
Based on our last review, our target price for the counter is N3.24 (BUY) which is a 96.4% upside to last close price of N1.65. We will review our estimates following further discussion with management.
Editor’s Note
At the close of trading today, the shares
of Fidelity Bank Plc moved up by a tick size of +1.76% to close at N1.73k from the previous price of
N1.70k. YTD, the stock has dropped by -29.67%.
Visit
Fidelity
Bank Plc IR Page on Proshare MARKETS
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