Fidelity Bank Doubles Profit To N101bn In 2023 As Debts Hits N577bn

Fidelity Bank Plc recorded sterling performance in 2023, growing its profit after tax by 116.79 per cent to N101.29bn but the lender also piled up debts during the year, THE WHISTLER can report.

The bank’s revenue increased by 64.3 per cent from N337bn in 2022 toN553.8bn in 2023, an analysis made of the company’s financial statement for 2023 conducted by THE WHISTLER reveals.

The lender’s total assets rose during the period from N3.9tn in 2022 to N6.2tn in the full year of 2023 while the company sits on N383.4bn cash and cash equivalent.

But the lender has piled up N557.028bn debt by the end of 2023 as the group’s liability rose to N5.79tn which is a 57.6 per cent surge from the N3.67tn liability in 2022.

The company’s debt profile saw a surge from N261.46bn debts as of 2022 to N577bn debts incurred in the full year of 2023.

A breakdown of the debts reveals that the amount of $400m Euro Bond issued has risen to N382.42bn in 2023 from N178.2bn which was the amortised cost held in 2022.

The bank took a fresh loan from Rand Merchant Bank amounting to $50m which translates to N48.8bn amortized cost as of December 2023.

The amount of N42.17bn rose from the N41.3.78bn in 2022 and it represents the amortised cost of 10-Year N41.2bn Subordinated Unsecured Series I Bonds issued at 8.5 per cent.

The bank issued the bond to support the bank’s SME and Retail Banking Businesses as well as its Information and Technology Infrastructure.

The lender also borrowed $23m from Bank One Mauritius which will mature on March 27, 2024 at an interest rate of 10.97 per cent ($15m) and 10.98 per cent ($8m) per annum respectively.

Fidelity measured the amortised cost of the loan from Bank One Mauritius at N22.38bn by 2023 end.

By April 27, 2024 Fidelity Bank’s N20.28bn debt which was a wholesale borrowing from Development Bank of Nigeria at an interest of 10 per cent per annum will mature. The amount was measured at N15.26bn in 2022.

Fidelity pays interest on the debt “semi-annually, with principal repayment after 1 year moratorium period, effective 27th October 2022 to maturity. The borrowing is an unsecured borrowing.”

The books further revealed that as of January 1, 2023 Fidelity’s debt and other borrowed funds were N261.46bn but it borrowed an additional N129bn in 2023 while accrued interest was N10.7bn.

The foreign exchange reform introduced by the Central Bank of Nigeria (CBN) which led to the depreciation of the naira from around N600 to over N900 affected Fidelity’s foreign exchange difference in dollar-denominated debts.

The foreign exchange difference surged from N9.25bn recorded in 2022 to N194.76bn by December 31, 2023.