It was a celebration galore at the Fidelity Bank Plc boardroom recently at Kofo Abayomi close ,Lagos Island ,the bank’s corporate headquarters ; excited executive and top management staff members were said to be seen throwing banters ,patting each other backs and clicking glasses ; other bank’s employees were equally walking tall to celebrate Nneka Onyeali-Ikpe ,the bank CEO’s one year impressive scorecard in office in a short party organized to mark her laudable performance .
The reason behind the celebration may not be far to seek . The tier-2 bank declared a N35 billion in profit after tax in the financial year ended December 2021, the highest in the company’s history. Also , in a Year to date duration the share price is up 25% and up 47% in the last one year.
Filled to the brim with a sense of fulfillment the CEO declared :“subscribers to our flagship Stock Select Newsletter will be up by 47% since we recommended this stock last June and up by 15% when we recommended it again in February” .According to its MD/CEO, the results was due to “the disciplined execution of our strategy and capacity to deliver superior returns to shareholders. Profit before tax grew by 35.7% to N38.1bn from N28.1bn in 2020FY, which translates to an increase in RoAE to 12.5% from 10.5% in 2020FY.”
The bank remains in contention as one of the most promising tier-2 banks in the country, having steadily grown profits by a compounded annual growth rate of 19%. It has also rewarded shareholders with a constant stream of dividends increasing last year’s dividend by 59% to 35 kobo per share. At current prices, the dividend yield is still an impressive 10% making it one of the most attractive banking stocks on the Nigerian Exchange.
The bank was also able to grow its deposits from N1.69 trillion to N2 trillion another first in the bank’s history. Only tier-1 banks have more deposits than Fidelity Bank. It is also climbing in terms of net assets and was just N3 billion shy of crossing the N300 billion mark.
In terms of capital adequacy ratio, it remains strong at 15% with N231 billion in tier-1 capital and another N75.6 billion in tier-2 capital all massive improvements from 2020 when it was N204 billion and N39.6 billion respectively.
But for those who know the pedigree of Nneka Onyeali-Ikpe in this profession and her plans from the beginning on how She set out to achieve her vision for the bank ,the impressive performance registered within a year may not spring any surprise .
Not many can beat her professional pedigree. Nneka Onyeali-Ikpe has served as an Executive Director at two different banks- first at the erstwhile Enterprise Bank (now Heritage Bank) and later, Fidelity Bank Plc.
She is well regarded as a turnaround specialist- with her well acknowledged effort as part of the team that took over the former Enterprise Bank and repositioned the Bank before its acquisition by Heritage Bank. She has prepared for each blind corner with her strongest shoulder dropped, ready to smash through whatever is thrown at you next. Now that the dust is cleared she is will be standing tall with a mood of a champion and a victor
Mrs. Nneka Onyeali-Ikpe is diehard advocate of John C. Maxwell, an American author and speaker on the true essence of leadership and the power of optimism .According to Maxwell while “the pessimist complains about the wind. ,the optimist expects it to change but the leader adjusts the sails”.
Fidelity Bank CEO, Mrs. Nneka Onyeali-Ikpe is a leader of Maxwell’s dream She is leading Fidelity Bank through a significant evolution of business culture with the primary objective of improving operational efficiency and expanding market share. Mrs. Onyeali-Ikpe is adjusting “the sails” to ensure that her colleagues at Fidelity Bank have the wind at their backs as they work toward common goals and individual successes.
Currently, Nneka has her sights fixed on positioning the bank as one of Nigeria’s leading financial institutions, which leverages automation and robotics to replace manual and repetitive processes. The global lockdown caused by the Covid-19 pandemic was a messenger unlike any other, signaling that Nigeria’s traditional and over-the-counter banking systems are no longer viable.
Since assumed the office in January 1 2021, the bank’s first female CEO and MD, has outlined a seven-point agenda to move the bank further in its quest to become a tier-1 bank that is well-positioned to outlive the competition and serve well into the future.
Fidelity Bank’s seven-point agenda focuses on brand architecture, brand building and refresh, talent development and transformation, product and service delivery, agility and performance discipline, digital transformation, and regulatory compliance.
To attain the above objectives , some of the strategies adopted ranged from embarking on an Innovation drive through the implementation of new processes and techniques. The bank is also executing fresh ideas to ensure continuous process improvement, reduce cost to serve, increase competitiveness, improve brand recognition and value, build new partnerships and relationships, drive turnover, and increase profitability.
Its brand refresh ,according to the bank ,is aimed at increasing top-of-mind awareness of the Fidelity brand by external and internal stakeholders.
Another strategy is a workforce transformation which is to create a future readily supported by a high performing and empowered workforce. This ,the bank noted , would be achieved by deepening the skills and competencies of staff across the bank, entrenching a culture of high performance, and embedding new ways of working in the bank. So far, the commencement of capacity building training for staff and senior management training are some of the initiatives implemented.
Furthermore , to build brand loyalty through personalized and seamless customer experience delivery the bank emphasized the for service excellence as its strategy .As a step towards this, an award-winning virtual assistant IVY, a revolutionary chatbot that handles simple tasks like account opening to complex tasks such as complaint resolution, bill payment, transferring users to a live agent, loans, fixed deposit applications, and answering random questions, has been adopted .
Moreover , to achieve the above objectives ,the bank is sharpening its digital transformation drive that involves an end-to-end digitization across all facets of the business. In line with this, the bank has launched a novel digital service —Pay Yourself —which revolutionized payday for salary earners and SMEs.
Toward the same agenda and to ensure focus on strong fundamentals, asset quality, and strategic cost management, performance discipline is now at the front burner .Some of the initiatives already carried out in this regard include the Policy Familiarization Program —a capacity-building project geared towards building a knowledgeable and versatile staff network/raising subject matter experts in all business areas that kicked off in March. Another one is the One Culture Project- which was initiated to reinforce enabling behaviours and value systems towards fulfilling the bank’s goals of Project Alpha- aimed at helping the bank develop a robust and holistic learning and development framework for all staff.
The bank is also bent on accelerated growth which will drive aggressive market penetration and business diversification. This will be achieved through deeper penetration in key retail markets.Other initiatives geared towards deepening growth include; accelerated play in the SME segment, renewal of institutional banking, and drive for transaction-based propositions in corporate banking.
With this seven pronged agenda, Fidelity Bank is well on its way to leading the sector while revolutionizing Nigeria’s financial landscape.
However, to sustain this impressive performance, Fidelity Bank will need more than a strong performance from its fees and other income division to keep investors happy.
Despite these impressive fundamentals recorded in 2021, the bank has increased fees and commissions to thank for this year’s performance. Decoupling its financial statements reveal an increase in commission and fees from N19.8 billion in 2020 to N29.4 billion in 2021. This helped bolster profits mitigating a reduction in net interest income that was hit by an industry-wide dip that affected nearly all banks. Without a surge in fees income, foreign exchange gains and aggressive loan recoveries, the profit story may have been grim this year. Suffice to add that the same central bank that triggered an interest margin contraction via policy can also wield a similar stick on commissions.
There is still a lot of work to be done to get the bank to achieve its lofty ambitions of being one of the largest tier-2 banks and possibly get into tier-1 status. Its return on average equity of 12% is right within its 5-year average. Its cost to income ratio is still above 60% and will either need to improve income or massively cut down cost to be efficiently competitive.
