Fidelity Bank sustains profitability, growth amid COVID-19
Fidelity Bank Ghana recorded a remarkable profit before tax of GHC382 million in 2020, despite the challenges posed by the COVID-19 pandemic.
The remarkable profit represents a 19% increase from the GHC322 million recorded in 2019.
The Bank also grew its operating income by 8% over the prior year to GHC 978 million.
A statement issued in Accra by Fidelity Bank said operating expenses were well managed, growing at a relatively lower rate of 6% to GHC498 million in line with the Bank’s efficiency drive.
It said the performance was anchored on digitization, expenditure reprioritization and the adoption during the year of cost-containment measures aimed at mitigating the impact of COVID-19 on the Bank’s business.
The overall growth in revenues outpaced the increase in operating expenses, resulting in the Bank’s cost-to-income ratio declining to 51%.
The statement said the cost to income ratio measures a bank’s operating expenses as a percentage of its operating income.
“The low cost of operations as compared to the impressive increase in revenue shows the Bank’s efficiency and profitability despite the negative effects of COVID-19,” it said.
It said several key balance sheet items posted strong performance with deposits increasing by 25% to GHC6.51 billion and investment securities growing by 15% to GHC4.93 billion, exceeding the industry average in both cases.
The Bank’s gross loans and advances declined by 2% year-on-year to GHC2.4 billion, reflecting the impact of settlements during the year.
The statement said the Bank remained well-capitalized closing the year with total equity of GHC1.0 billion and a capital adequacy ratio of 21.43% which it said was well above the regulatory minimum of 13 per cent (reduced to 11.5% during the year by the Bank of Ghana (BoG) as a policy response to the COVID-19 pandemic).
“Fidelity Bank’s capital remains adequate for its current risk profile and planned growth of its business,” the statement said.
It said the Bank’s market-leading platforms and channels continue to attract customers, resulting in significant growth in digital and electronic transaction volumes during the year.
Julian Opuni, managing director of Fidelity Bank Ghana, speaking on the Bank’s 2020 financial performance, said “2020 was a challenging year for everyone. We are fortunate that our financial performance in 2020 revealed that we continue to make strong progress across all areas of our business.
“Moreover, we understand that our success is a function of the unwavering support that we receive from our loyal customers and we are grateful to them for their continued business,” Opuni said.
He said concerning the first quarter of 2021 financial performance, the Bank recently published its unaudited financial results for the quarter ended March 31, 2021.
It, therefore, declared a profit before tax of GHC104.5 million, 16% above the equivalent figure for the same period last year.
Profit after tax recorded a growth of 30% over the first quarter of 2020 to GHC89.5 million, driven by this strong profitability, the Bank’s capital adequacy ratio rose to 21.73% in Q1 2021 compared to 20.07% in the first quarter of 2020.
The Bank’s capital position remained robust and adequate for planned expansion and growth.
He said the Bank closed the quarter with a total deposit base of GHC 6.9 billion, growing by 13 per cent over the position recorded in the first quarter of 2020.
Although the Bank’s balance sheet declined by 8% against the position recorded in the first quarter of 2020, it maintained its average loans and advances book at GHC2.3 billion while increasing its investment in government securities by 38%.
Consequently, despite a much lower interest rate environment, net interest income rose to GHC 197.4 million, a 7% growth over Q1 2020 while non-interest income increased by 29% to GHC68.4 million.