By Bala Augie.
Fidelity Bank Nigeria Plc’s profit has surged on the back of higher interest rates as the lender earned more from customers while the digital segment continues to be a money spinner.
The lender’s profit surged 133.31 percent to N53.29 billion in June 2023 from N22.84 billion as at June 2022.
Gross earnings grew by 58.58 percent to N247.10 billion in June 2023 from N155.84 billion the previous year.
Net interest income (NII) followed the same growth trajectory as it was up 42.52 percent to N107.76 billion as at June 2023.
Net Interest Income (NII) is the difference between the interest income earned on loans, investments, and other interest-earning assets, and the interest paid on deposits and other interest-bearing liabilities, such as borrowings.
The increase in NII reflects a high yield environment as banks in Nigeria have been enjoying juicy yields, thanks to the central banks aggressive tightening cycle to reign in rising inflation.
The Central Bank of Nigeria lifted its benchmark interest rate by 25 bps to 18.75 percent in a decision announced on July 25th 2023, less than expected. It marks the fourth consecutive rate hike so far this year, bringing borrowing costs to their highest since the monetary policy rate was adopted in 2006.
Further analysis of Fidelity Bank’s financial statement shows non-interest income spiked by 333.38 percent to N54.52 billion, anchored on double-digit growth across key lines (Digital Income | Account Maintenance | FX Related Income | Trade | Collections etc.) and supported by increased customer transactions.