Monday, April 29, 2019 06:30 PM / Proshare MARKETS
Fidelity Bank Plc held
its Q1 2019 Investors and Analyst Conference Call Earnings Presentation.
Proshare NG participated along with leading market analysts and professionals.
However, despite repeated efforts, we could not
get in the following (4) questions analysts seek clarification on, either due
to format or time constraints:
are the likely impacts of IFRS9 provisions on the banks results for FY 2019
given that the adjustments in 2018 saw shareholder funds fall -3.4%, from N194.4bn in
2017 to N201.4bn in 2018?
- Will the growth in
Fidelity’s loan book likely lead to an upward adjustment in impairment
provisions, even though the book provisions declined from 5.7% in Q1 2018 to
4.9% in Q1 2019?
- The banking system is
increasingly consolidating with the merger between Diamond Bank and Access
Bank, are there any near term expectations of a Fidelity Bank merger,
especially ahead of Basel III?
- What is Fidelity Bank’s
likely conversion rate to digital banking over the next three quarters of 2019,
and are there new plans to optimize costs using technology?
to these question would provide the investing public some sense of the banks
forward strategy and competitive preparedness as the year progresses.
However, the management of the bank during the overview of its operating
environment within the period under review stated that political risks impacted
on the capital and money markets in Q1 2019 just as there was growing credits
on the back of improving macros. The Naira was relatively stable as oil price
was also stable within the period under review.
Thus, the bank’s retail and digital banking evolution report, as
presented in its IR presentation, reflected the followings;
growth in savings deposits anchored on increasing customer growth and improved
digital penetration at 43%.
81% of customers transactions are now done on electronic banking channels.
virtual assistant, Ivy is improving's customer engagements and insights have
been very positive.
lending is starting to gradually pick up.
Fidelity Bank Plc recorded a gross earnings of N48.44bn in Q1 2019 as
against N43.33bn in Q1 2018, up by +11.8% YoY
while the bank’s Profit After Tax increased by +28.36%
YoY from N4.62bn in Q1 2018 to N5.93bn in Q1 2019.
Table – Q1 2019 Unaudited Results
The bank’s balance sheet/statements of financial
position reflected that it recorded growths in Loans and advances and customer
deposits respectively among other balance sheet items.
At the close of trading today, the share price of
Fidelity Bank Plc dropped by -1.03% to close at N1.92k as against N1.94k
Visit Fidelity Bank Plc IR Page in Proshare MARKETS
Graph– One Year Share Price Movement
In a nutshell, below are the key takeaways from the Q1
2019 earnings presentation made by the bank’s management team;
- Fidelity Bank recorded
an FX income growth of 334.4% which was largely a combination of FX trading
income and revaluation gains. Further clarification by the bank will be a
welcome idea as the Naira was relatively stable during this period.
- The bank claimed to have
used the NIFEX rate in its balance sheet conversion at an exchange rate of
N360/USD as at Q1 2019. Though, the NIFEX rate was relatively close to the
NAFEX rate which is the rate considered to be market determined. It is
important to state that there has been a cessation of the NIFEX rate as the
final calculation of the rate was slated for December 31, 2018 while its final
publication on FMDQ website took effect on March 30, 2018.
- The bank’s capital adequacy
ratio (CAR) dropped to 16.5% in Q1 2019 from 16.7% in FY2018 and 17% in Q3 2018
respectively, excluding the Regulatory Adjustment, Fidelity CAR would have been
17.9% in Q1 2019. The bank’s expectation on the impact of IFRS 9 on 2019
profitability must be clearly clarified ahead of time.
- The bank set a guidance
of 6% to 6.5% on Net Interest Margin and currently behind the set target as at
Q1 2019 (5.1%).
- Its FCY loans grew by
16.0% YTD and now constitute about 41.9% of total loan book while the transport
sector was largely responsible for the decline in NPL to 4.9%
Source: Audited Annual Accounts of Nigerian Banks FY 2018
declares N5.93bn PAT in Q1 2019 Results,(SP:N1.93k)
declares N22.93bn PAT in 2018 Audited Results; Proposes 11 Kobo Final Dividend
Declares N17.86 billion PAT in Q3'18 Results (SP:N2.00k)
Q3 2018 Accounts
- Fidelity Bank Plc Announces Closed Period From Oct 19, 2018
Launches GAIM Season 3 Promo to Boost Savings Culture in Nigeria
Plc H1 2018 Conference Call and Earnings Presentation - The Key Takeaways
H1''18 Results - Lower Impairments; Higher Non-Interest Income Propels Earnings
Fidelity Bank Shares Have Declined by -30.9% YTD,
Underperforming The NSEASI by 17%
FIDELITYBK Declares N11.84bn PAT in Q2 2018
10. Fidelity Bank, BOI, Ford Foundation Unveils Lending Scheme
for Aba Leather Manufacturers