Fidelity Bank Ghana sustains profitability, growth despite COVID-19 Pandemic

Despite the challenges posed by the COVID-19 pandemic, Fidelity Bank Ghana recorded a remarkable profit before tax of GHC 382 million in 2020, representing a 19 per cent increase from the GHC 322 million recorded in 2019. 

The Bank also grew its operating income by eight per cent over the prior year to GH 978 million.

Operating expenses were well managed, growing at a relatively lower rate of six per cent to GHS 498 million in line with the bank’s efficiency drive, anchored on digitisation, expenditure reprioritization and the adoption during the year of cost containment measures aimed at mitigating the impact of COVID-19 on the Bank’s business.

The bank’s financial results during the period under review all revealed that the overall growth in revenues outpaced the increase in operating expenses, resulting in the bank’s cost-to-income ratio declining further to 51 per cent.

The cost to income ratio measures a bank’s operating expenses as a percentage of its operating income.

The low cost of operations as compared to the impressive increase in revenue shows the Bank’s efficiency and profitability in spite of the negative effects of COVID-19.

Several key balance sheet items posted strong performance with deposits increasing by 25 per cent to GHC 6.51 billion and investment securities growing by 15 per cent to GHC 4.93 billion, exceeding the industry average in both cases. The Bank’s gross loans and advances declined by 2 percent year-on-year to GHC2.4 billion, reflecting the impact of settlements during the year.

The Bank remains well capitalised closing the year with total equity of GHC1.0 billion and a capital adequacy ratio of 21.43 per cent which is well above the regulatory minimum of 13 per cent (reduced to 11.5 per cent during the year by the Bank of Ghana as a policy response to the COVID-19 pandemic).

Speaking on the bank’s 2020 financial performance, Julian Opuni, Managing Director of Fidelity Bank Ghana, stated, “2020 was a challenging year for everyone. We are fortunate that our financial performance in 2020 revealed that we continue to make strong progress across all areas of our business. Moreover, we understand that our success is a function of the unwavering support that we receive from our loyal customers and we are grateful to them for their continued business.”

With respect to the first quarter of 2021 financial performance, Fidelity Bank recently published its unaudited financial results for the quarter ended March 2021, declaring a profit before tax of GHC 104.5 million, 16 percent in excess of the equivalent figure for the same period last year. Profit after tax recorded a growth of 30 percent over Q1 2020 to GHC 89.5 million.

Driven by this strong profitability, the Bank’s capital adequacy ratio rose to 21.73% in Q1 2021 (Q1 2020: 20.07 per cent). Fidelity’s capital adequacy ratio is significantly above the regulatory minimum threshold of 13 per cent. The Bank’s capital position remains robust and adequate for planned expansion and growth.

The Bank closed the quarter with a total deposit base of GHC 6.9 billion, growing by 13 per cent over the position recorded in Q1 2020.

 Although the Bank’s balance sheet declined by eight per cent against the position recorded in Q1 2020, it maintained its average loans and advances book at GHC 2.3 billion while increasing its investment in government securities by 38 percent.

 Consequently, despite a much lower interest rate environment, net interest income rose to GHC 197.4 million, a seven per cent growth over Q1 2020 while non-interest income increased by 29 per cent to GHC 68.4 million.

BY TIMES REPORTER

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