Fidelity Bank has shown clearly where it is headed, the very top of its banking peers, what with its audacious moves in recent times from powering its way to a tier 1  bank, to spiking its balance and sheet size and now moving to take over Union Bank UK.

It all began with a stellar performance that caused Fitch Ratings to revisit the bank’s rating, with an upgrade in its long-term issuer default rating (IDR) from ‘B-‘ to ‘B’, an indication of the increased creditworthiness and excellent track record of the bank.

Notably, the rating agency also upgraded Fidelity Bank’s National Long-Term Rating to “(nga)” from “BBB+(nga),” placing the financial institution among the top tiers of banks in the country. Simply put, the B credit rating is given to a prospective borrower that is rated to have the ability to meet its financial commitments.

According to Fitch, the upgrade recorded by Fidelity Bank was due to its improved business profile and resilient financial metrics. For better context of how the ratings are generated via the Viability Rating (VR), which is used to reflect the asset quality, reasonable capitalization, and liquidity of a bank.

Little wonder obtaining credit by the bank was not such a big deal; recall that during that financial year, the bank demonstrate a n acute ability to attract credit when it raised $400 million from the international debt market through a 5-year tenor Eurobond, with a 7.765% coupon in October 2021.

To achieve that, the lender was able to assemble a team comprising JP Morgan, Citigroup, and Afreximbank to manage the Eurobond jointly due to the bank’s reputation for world-class corporate governance and risk management, along with its highly experienced and top-quality management.

This further demonstrates the bank’s prudent risk management practice as well as its impressive track record in the global markets having previously issued Eurobonds in 2013 and 2017.

This improved rating by Fitch was on the bank of a stellar full year performance in the 2021 financial year when its non-performing loans ratio dropped to 2.9% from 3.8% recorded in the previous year, one of the lowest NPL ratios in the Nigerian banking industry, according to analysts. In the period, the bank strengthened its capital adequacy ratio to 20.1%, while returns on average equity rose to 12.5%, showing how well the bank is utilizing shareholders fund in generating profit.

In terms of balance sheet components, Fidelity Bank grew its customer deposits by 19.2% to N2.02 trillion, while its loans and advances improved by 25.1% to N1.66 trillion. Its total asset appreciated by 19.3% to N3.29 trillion in the same period.

It was a good year in which the bank ramped up its top and bottom line by growing gross earnings by 21.6% to N250.8 billion, while profit before tax surged by 35.7% to N38.1 billion. The good run provided the basis for Proshare to list the bank a tier 1 bank.

TheProsharemodel is based on an index that ranks Nigerian banks based on their aggregate points from CAR, NPL, LR, and Board’s Gender Mix (a proxy of Governance).Notably, these performance ratios were selected after querying half a dozen other variables namely: Assets Size (Ass), Gross Earnings (GRE), Net Interest Margin (NIM), Cost to Income Ratio (CIR), Digital Earnings, Loans to Deposit Ratio (LDR) Cost of Risk (CoR) and Ratio of Non-executive-to total directors.

Theimpressive growth trajectory of the bank observed in the 2021 full year,was maintained into the half year of 2022.

In the six months ending June 2022, the bank posted profit after tax of N23.307 billion for its 2022 half-year results, representing a growth of 20.72% year-on-year. This is at it made significant improvements across key performance indicators despite an inflationary year, where businesses and their consumers have had to deal with the rising cost of goods and services.

The bank improved gross earnings by 37.87% to N154.843 billion from N112.304 billion reported in 2021, driven by a 50% growth in net-interest income. This helped profit before tax to move up to N25.079 billion from N20.628 billion posted in 2021, representing a growth of 21.57%. Interest and similar income using the effective interest rate method rose by 48.45% from N 85.090 billion recorded in the first quarter (Q1) of 2021 to N 126.348 billion in the period under review.

Similarly, Net Interest Margin improved to 6.4% from 4.7% in 2021FY, due to a combination of improved yields on average earning assets and a decline in average funding cost. Average yields on earning assets increased by 211bps YoY to 11.5% while average funding cost declined by 84bps to 4.0% YoY, which resulted in 50.4% growth in net interest income to N75.6bn.

The bank’s Profit before income tax for Q1’2022 inched slightly up by 1.9% from N10.134 billion in Q1 2021 to N10.324 billion.

Market watchers hardly faults the bank’s growth trajectory given the visible moves made by the bank since the appointment of CEO,NnekaOnyeali-Ikpe;  She had hinted on the bank’s strategic ambitions earlier in the 2021 financial year when she declared that  the goal of the bank is to be named a tier-1 bank, with a timeline of four year.

“When I assumed the role of the CEO of Fidelity Bank at the beginning of the year, we announced our ambition to be recognized as a tier-one bank in another four years. A tall ambition, you may say, given the dynamic operating landscape but nevertheless achievable. We therefore listed seven focus areas critical to achieving this objective namely:  Accelerated Growth, Innovation Drive, Brand Refresh, Performance Discipline, Digital Transformation, Service Excellence and Workforce Transformation,” she had said.

“While these are early days, we are happy to report that we are on-track to meeting our tier-one ambition as reflected in our financial results that have indicated significant growth on key reporting lines quarter-on- quarter,” she added.

Fair ambition, after all anyone can dream but the financial market got a rude shock with the announcement that Fidelity Bank has gotten approval by the Central Bank of Nigeria (CBN) to acquire 100 percent stake in Union Bank, UK. Such is the height of the bank’s ambition, to play only at the very top.

Commenting on the agreement, MrsNnekaOnyeali-Ikpe, the Managing Director/Chief Executive Officer, Fidelity Bank said, “This transaction aligns with our strategic plan of expanding our services touchpoints beyond the Nigerian market and providing straight-through services that meet and exceed the needs of our growing clients. The diverse bouquet and business model of union Bank UK offer a compelling synergy and we hope to build on the existing capacity to create a scalable and more sustaining service franchise that will support the wider ecosystem of our trade businesses and diaspora banking services.

Fidelity Bank’s actions have been quick and decisive, market watchers wondering what next. What comes next is only a matter of conjecture but it does smell big; another ‘banger’ given the events of the last one and half year.

Fidelity Bank is a full-fledged commercial bank operating in Nigeria with over 6.5 million customers and 250 business offices and digital banking channels across the country. The bank was recently recognized as the Best SME Bank Nigeria 2022 by the Global Banking & Finance Awards. It has also won awards for the “Fastest Growing Bank” and “MSME & Entrepreneurship Financing Bank of the Year” at the 2021 BusinessDay Banks and Other Financial Institutions (BAFI) Awards, a testament of Fidelity Bank’s support for business growth and impressive track records over the years.