Shareholders of Fidelity Bank Plc yesterday approved the proposal by the directors to raise N200 billion through corporate bonds to fund its operations and deliver higher returns to investors and other stakeholders.a
The shareholders, who gave the approval at the 21st Annual General Meeting held in Lagos, commended the performance of the bank for the year ended June 30, 2009.
Other banks such as First Bank of Nigeria Plc, United Bank for Africa Plc, Zenith Bank Plc have plans to float corporate bonds, while GTBank Plc is already in the market for N200 billion bonds.
While approving the bond, shareholders of Fidelity Bank expressed confidence that as one the banks that passed the Central Bank of Nigeria (CBN) special audit, the offer would be successful as investors still confidence in the bank.
In his report, the Chairman of the bank, Chief Christopher Ezeh, said the bank was cautious in order to hedge against the rising unpredictability of the domestic financial market. “To that extent, our risk asset creation structure was strengthened and the credit business still remains the focal point of our activities. The result of this strategy was manifested in the financial year end and performance,” he said.
According to him, at end of June 30, 200, gross earnings stood at N72.27 billion, showing an increase of 69 per cent over the N42.66 billion posted in the 2008.
“Remarkably, profit before provision on risk assets and taxation was N23.57 billion, up by 30 per cent from N18.08 billion in 2008. However, the impact of exceptional provisions on risk assets affected profit after tax, which came down from N13.36 billion to N1.43 billion. About N19.81 billion provisioning was made for doubtful advances and other assets in line with the new regulatory direction of the CBN. Industry watchers will acknowledge that this performance is stellar considering how the Nigerian banking sector has fared this period,” he said.
The chairman told the shareholders that this cycle in the industry is temporary, assuring that having maintained a traditional profile of profitability over the years, Fidelity Bank will post a more impressive performance in the coming years.
Despite the reduced profit, the directors recommended a dividend of five kobo per share, which was approved by the shareholders. Some o f the shareholders commended the dividend saying, paying a dividend in this trying times when many banks are posting losses, shows that the bank is committed to the welfare of investors.
Speaking on efforts to reduce bad loans provisioning, the Managing Director of Fidelity Bank, Mr. Reginald Ihejiahi, said that the bank has raised the bar in its risk management standard in order to remain in tune with developments at all times.
“In order to drive home the new vision, our risk management team has begun to put in place measures in t his direction, many of which we believe will crystallise into lower provisioning number in the years ahead,” he said.