Fidelity Bank’s recently released its H1 2023 audited numbers showed significant y/y and Q/q growth in Pre-tax profit, driven by significant growths in both Interest and Non-Interest Income. Interest Income grew 39.4% y/y, which according to the bank’s Management, was driven by expansion in earning assets and improved yields on assets. Net Loans to Customers were up 25.1% in H1 compared with the December 2022 position. Growth in Non-Interest Income on the other hand, was driven by foreign currency revaluation gains, trading gains and strong growth in several Fee Income lines.
Interest Expense also grew significantly, up 35.5% y/y and 24.0% q/q (Q2 2023 compared with Q1 2023). The y/y growth was mainly due to a significant growth in Interest Expense on Term deposits (up 48.7% y/y) and savings deposits (up 358.3% y/y). We believe growth in interest expense on savings account is due to the strong growth in the monetary policy rate over the period. Customer deposits were up 23.2% in H1 compared to December 2022. The bank’s cost of funds declined slightly to 4.5% in H1 2023 compared with 4.0% in H1 2022. Overall, Net Interest Income grew strongly, up 42.6% y/y to N107.8bn in H1 2023 from N75.6bn in H1 2022, bringing Net Interest Margin (NIM) to 7.2% in H1 2023 from 6.4% in H1 2022 and 6.3% for FY 2022.
