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Fidelity Bank Plc Q1’17 Conference Call & Earnings Presentation - The Key Takeaways

Proshare

Wednesday, May 03, 2017  6:05 PM/ Proshare Markets  

Fidelity Bank Plc today held its Q1’17 Investors and Analyst Conference Call Earnings Presentation. Proshare NG participated along with leading market analysts and professionals. 

The bank started the year on a strong note as its Gross earnings increased by 18.8% YoY to N40.8 billion. This was driven by a combination of increased yields on earning assets and an absolute growth in the volume of earning assets which led to a 24.1% YoY growth in interest income. Also, its total interest income moved up by 24.1% to N36.2bn compared to N29.2bn in Q1 2016. 

The double-digit growth in interest income on loans and liquid assets reflected the higher interest rate environment witnessed in Q1 2017 as interest income on loans remains the key revenue growth line contributing the largest growth to total income in absolute terms. 

The bank’s E-banking income dropped by 21.2% YoY. This was largely driven by the stoppage of international transactions on its naira denominated cards. Despite this, it still witnessed significant growth on other E-banking products which grew by over N0.8 billion in Q1 2017. 

The bank’s cost optimization initiatives continued to deliver cost savings as total operating expenses declined by 10.4% YoY to N14.4 billion which was driven by a decline in over 60% of its operating expense lines in Q1 2017 with staff cost, depreciation, regulatory cost and technology accounting for about 80% of the decline. 

The bank’s deposits increased by 0.9% YTD to N800.2 billion due to 5.6% (N8.7 billion) and 0.4% increase in savings and demand deposits respectively while its net loans and advances increased by 1.7% YTD to N730.4 billion as the bank remained cautious of increasing its exposure in selected sectors of the economy. 

In a nutshell, below are the key takeaways from the Q1’17 earnings presentation made by the bank management; 

  • The bank plans to audit its Half Year 2017 Financial Results as a way of improving its processes.
     
  • The bank is exposed to Etisalat and it is currently in talks with the telecoms company. An update will be given at the end of the discussion.
     
  •  In line with its FY 2017 guidance, the bank’s growth expectations on key indicators like Net Interest Margin, Tax rate, Cost to Income Ratio, Proposed Dividends, NPL Ratio and ROE are on track.


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