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Fidelity Bank saw a 1,433% jump in provision for litigation to N34.8 billion as at June 2025, up from N2.27 billion as at December 2024, largely due to the Sagecom judgement against it as well as other high-stakes legal disputes.
Fidelity Bank says it is currently in discussions with Sagecom for an amicable determination and settlement of the judgment sum.
The N34.8 billion provision was recognized in the account to take care of the bank’s obligation.
The rise in provision is due to a judgment of the Supreme Court delivered in April 2025 in the matter of Fidelity Bank v. Sagecom Concepts Limited & Anor.
The Sagecom Litigation arose from a legacy transaction between the defunct FSB International Bank and Sagecom Concepts Limited.
FSB granted a credit facility to G.Cappa Plc in 2002. The facility was secured with a mortgage on property located in Ikoyi. G.Cappa defaulted on the repayment of the loan and, in a bid to prevent FSB from selling the mortgaged property, G.Cappa commenced an action against FSB at the Federal High Court, Lagos, in 2005 seeking to restrain the Bank from selling the property.
The Federal High Court in its judgment of 2011 ruled that the Bank as legal mortgagor rightfully sold the property to Sagecom but referred the issue of possession to the State High Court.
In the meantime, G.Cappa remained in possession of the property and kept collecting rents there from.
Sagecom then instituted an action against the Bank and G.Cappa at the Lagos State High Court in 2011 seeking damages against G.Cappa and the Bank for breach of contract and for possession of the property.
In 2018, the Lagos High Court awarded judgment in favour of Sagecom against G. Cappa and the Bank.
The Bank appealed against the judgment to the Court of Appeal and further to the Supreme Court contending that any loss due to Sagecom was caused by G.Cappa and that G.Cappa alone should be responsible for any damages due to Sagecom.
In April 2025, the Supreme Court affirmed the decision of the High Court and the Court of Appeal.
Value of claims filed against Fidelity bank jumps to N239.9 billion
As at the June, 2025, reporting date, the Bank was involved in 81 cases as defendant (31 December 2024 –77) and 9 cases as Plaintiff (31 December 2024 – 9).
As at 30 June 2025, the aggregate value of claims filed against the Bank is estimated at ₦239.9 billion, up from N14 billion and 77 cases as at 31 Dec. 2024.
Conversely, the total value of claims instituted by the Bank in nine (9) cases, plus counterclaims, is estimated at ₦5 billion as at 30 June 2025, (31 Dec. 2024: ₦5 billion, 9 cases). Based on the advice of the Bank’s legal team and the case facts, the management of the Bank estimates a potential loss of ₦31.6 billion (31 Dec 2024 – ₦2.27 billion) upon conclusion of the cases.
Legal expenses for the Group also jumped to N30 billion from N701 million in 2024. The second highest expense line (under other operating expenses) after Banking sector resolution (AMCON) cost of N50.98 billion.
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