Data about related party transactions in respect of entities controlled by Key insiders and Management Personnel shows that Fidelity Bank Insiders reduced their deposits at the bank even as they increased their loan exposures.
MoneyCentral analysis of Fidelity Bank’s related party disclosure in compliance with Central Bank of Nigeria (CBN) circular BSD/1/2004, shows that deposits by related parties (including current and former directors) fell by 57.93% to only N591.152 million as at December 2021, compared to N1.405 billion a year earlier.
Meanwhile in the same period, outstanding loan amounts extended to related parties and key management personnel increased by 20.6% to N97.733 billion as at December 2021, compared to N81 billion a year ago.
As of December 31 the Fidelity Bank loans were N97.142 billion more than the deposits it had from insiders, regulatory filings show. Typically, the ideal loan-to-deposit ratio is 80% to 90%.
For these narrow band of insiders at Fidelity Bank however, it meant that their loan to deposit ratio approach a staggering 16,536 percent, meaning that for every N100 of insider deposits, it has lent out N16,536 to them supported by deposits from other customers of the bank and borrowing from the market.
Some of the largest outstanding loans by value include, N11.362 billion owed by A-Z Petroleum Products Ltd with Alex Ojukwu as the insider, listed as a Term Loan/Overdraft, Genesis Sojourner Ltd with Ichie Nnaeto Orazulike as the related party, which has term Loan/Overdraft outstanding of N1.257 billion, Onyeali-Ikpe Nnekachinwe the Fidelity Bank Managing Director who owes N167 million in term Loan/Credit Card, and Obaro Alfred Odeghe, a Former Director at Fidelity Bank with outstanding N172.95 million in term Loan/Credit Card.
While it is unclear as to why the Fidelity Bank Insiders did not have more of their cash deposited with the bank, Fidelity Bank says most of the insider related loans are performing except 2 loans classified as lost in the filing.
The lost loans were the Finance Lease/Overdraft of N286.27 million given to Cy Incorporated Nig. Ltd, controlled by Mrs. Onome Olaolu (a Former Director) in Fidelity Bank and Term Loan/Overdraft of N767 million extended to Equipment Solutions and Logistics Services Ltd controlled by Mr. Ik Mbagwu.