By Niyi Jacobs
Fidelity Bank has reported a potential legal loss of N2billion as of June 30.
This significant increase in potential legal liability has raised concerns among investors and analysts.
The bank is currently embroiled in 63 cases as a defendant and 7 cases as a plaintiff, with the total amount claimed against them rising to an estimated N12.97 billion.
The potential legal loss of N2 billion is a significant portion of this amount, and the bank’s management has made provisions for this potential loss.
This was revealed In the bank’s financial statement filed on the Nigeria Exchange Limited recently
However, the bank’s legal woes are likely to continue to weigh on its financial performance in the short term.
Meanwhile, Fidelity Bank Plc announced a profit after tax of N158.6bn for the first half of the year, representing a 36.2 per cent increase from the N116.4bn posted in the same period last year.
The bank’s gross earnings surged to N512.9bn, compared to N247.1bn in H1 2023, marking a 107.3 per cent increase.
The profit growth was primarily driven by an increase in net interest income, which rose by 230.3 per cent to N290.5bn from N87.9bn in H1 2023.
Additionally, Fidelity Bank’s fee and commission income increased to N35.1bn, up from N24.1bn, indicating a 45.4 per cent growth. The total operating revenue, after accounting for operating expenses, reached N200.9bn, higher than N76.3bn in the previous year.
Operating expenses, which totalled N128.6bn, increased from N64.0bn in H1 2023, largely due to inflationary pressures and increased investments in technology and customer service enhancements.
The bank’s total assets stood at N7.93tn, an 11.21 per cent rise from N6.23tn recorded in the previous year, reflecting a growth trajectory driven by strong customer deposits and increased loans and advances.
The bank reported cash and cash equivalents of N801.7bn, alongside restricted balances with the central bank amounting to N1.22 tn.
Notably, loans and advances to customers surged by 21.25 per cent to N3.75tn, up from N3.09tn the previous year. Additionally, investment securities reached N1.73tn, demonstrating the bank’s strategic investments in financial assets.
The equity of Fidelity Bank also showed resilience, reaching N629.4bn, a significant increase from N437.3 bn reported last year. The share capital remained stable at N16 bn, while retained earnings grew to N154.6bn
The bank’s Managing Director, Nneka Onyeali-Ikpe, has attributed the legal challenges to the bank’s rapid growth and expansion. “We are committed to resolving these legal issues and minimizing their impact on our financial performance,” she said. “We remain focused on delivering value to our shareholders and customers.”
