Fidelity Bank’s Balancing Act: Steady Amidst Turbulence

Fidelity Bank has been on a roll, with impressive financial results in the last two years. Between September 2024 and September 2025, the bank’s shares surged by 21.7% year-to-date and a one-year return of 128.86%. In 2024, Fidelity Bank’s Profit Before Tax (PBT) jumped by 210% year-on-year to N385.2 billion, with gross earnings surpassing N1 trillion for the first time.

Between its resources and strategic capability, Fidelity Bank is well-positioned to navigate the challenges of a volatile economic environment, leveraging its strong non-interest income, growing loan portfolio, and extensive customer touch points to drive growth and maintain its competitive edge in the Nigerian banking sector.

In 2025, Fidelity Bank is giving others a run for their money. Total assets in the Fidelity Bank climbed to N10.55 trillion, up from N8.82 trillion in December 2024, a testament to the bank’s ability to adapt to changing market conditions. A puffy assets level could indicate improved strengths in mopping up transactions, including a better position in maturity transformation- the stuff banks are best suited for. It can also mean that the bank has applied some elastic to its wings in the form of more customer touch points, branches and Point of Sale devices. For Fidelity, it was all of these and more.

In the period, earning assets climbed 19.6 percent to N10.55 trillion, confirming that indeed the rise in total assets could be due, in part, to a better hold of the job of maturity transformation. Much of this is seen in how the bank grew its interest income by 44.6% to N843.48 billion from N583.45 billion. This is even as interest expense was hot in chase at an even faster pace to N414.2 billion from N238.03 billion. The rather exuberant pace couldn’t do damage because of its Lilliputian stance against the leviathan of interest income.

It was a period the bank held steady what it earns from assets and what it pays for them. The bank’s yield on assets was a respectable 8.0 percent while its cost of funds was 6.3 percent, earning it a spread of 1.7 percent. The bank’s yield on assets was 8.0 percent, while its cost of funds was 6.3 percent, resulting in a spread of 1.7 percent. This represents a decline from the previous year’s spread, indicating pressure on margins. Last year, the yield was 8.6 percent, while the cost of funds was 4.2 percent.

Despite this challenging environment, the bank’s gross earnings rose by 44.3% to N1.11 trillion from N772.47 billion, driven by strong growth in interest income and non-interest income. However, the bank’s Net Interest Margin (NIM) declined from 20.1 percent to 18.3 percent, reflecting the pressure on margins. At the centre of the gains in this play at interest rates is the bank’s loan portfolio and deposit level. The bank’s loans and advances grew by 10.5% to N4.85 trillion, while deposits increased by 16.8% to N6.94 trillion. The bank’s loan-to-deposit ratio stood at 69.9%, indicating that it has room to expand its lending activities to support revenue growth.

The bank’s decision to increase its lending, giving out 76 kobo for every naira deposited compared to 73 kobo previously, indicates a big heart for risk, given the rising level of bad loans, which climbed from 4.2% to 4.5% during the period. Typically, banks tighten lending standards when bad loans are on the rise, to mitigate further credit risk. The bank’s slightly more aggressive lending stance may indicate that it’s trying to balance growth with risk management, but it also raises concerns about potential future asset quality pressures.

The bank’s decision to increase its loan book, despite a rising bad loan ratio, has analysts intrigued. If it can maintain its 1.7% spread, it suggests the bank is managing to balance growth with profitability. On the other hand, its non-interest income is a bright spot, with fees and commissions leaping 53.4% to N271.37 billion, a significant jump from last year’s N189.01 billion.

The bank’s cautious approach to navigating rising interest rates and global economic uncertainty is evident in its financial performance. Despite piling costs, the bank managed to balance earnings and expenditure, mitigating the impact on profits. Pretax profits declined 5.7% to N281.41 billion, as operating expenses spiked 45% to N344.29 billion, causing the pre-tax margin to slip to 25.3% from 34.7%. Net profit also declined 5.7% to N211.73 billion. The bank’s leadership remains optimistic, expecting a stable economic environment and aiming to maintain its position.