Fidelity Bank, a tier-two Nigerian lender reported a 400 percent jump in its credit loss expense in 2020 to N15.7 billion, from a write back (reversal) of N5.29 billion in the earlier 2019 period.
The bank said the increase in expected credit loss (ECLs) of the portfolio was driven by an increase in the gross size of the portfolio and movements between stages as a result of increases in credit risk and a deterioration in economic conditions.
Nigeria’s economy is forecast to have contracted last year and will expand at the slowest pace among major emerging and developing economies in 2021.
As a result of the provisioning for credit loss, Fidelity Bank’s full year profits came in flat at N28 billion for the Full Year 2020 period, compared to N28.4billion in 2019.
Combined personnel and other operating expenses were flat for the FY period as the lender tried to rein in costs, while fee and commission income fell by 22.5 percent to N19.85 billion, compared to N25.26 billion in 2019.