26.8 C
Wednesday, May 29, 2024

Fidelity Bank Profit Slumps After N11.05bn Provisions

Must read

- Advertisement -

Fidelity Bank Nigeria Plc third quarter profit fell 7.09 percent after it set aside N11.05 billion in provisions to cover an expected spike in bad loans brought on by coronavirus pandemic.

Profit dropped to N20.40 billion in September 2020 from N19.05 billion the previous year.

Net interest income fell to N128.25 billion in the period under review as the dovish mood of the central led to deterioration in fixed instrument securities, and the yield environment is expected to be depressed over the next few quarters.

Analysts expect banks to hike provisions as they face an earnings shock from the plunge in oil prices, currency devaluation and the coronavirus pandemic.

The scale of the fallout from the virus related headwinds could be more severe than the economic headwinds of 2016 caused by the sharp drop in oil price of mid-2014 that stoked non-performing loans.

The central bank wants the nation’s lenders to restructure almost two-thirds of all loans to help borrowers cope with lower oil prices and economic fallout from the coronavirus.

Nigerian banks are also under pressure from their regulator, which expects lenders to extend 65% of their deposits as credit.

Further analysis of Fidelity Bank’s financial shows total operating expenses was up 5.82 percent to N63.79 billion in September 2020 from N60.28 billion.

- Advertisement -

More articles


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

- Advertisement -spot_img

Latest article