How Fidelity Bank is driving digital financial inclusion in Nigeria with impressive half year 2021 result

According to a report released by Enhancing Financial Innovation & Access (EFInA) earlier in June this year, about 38 million adults translating to 36% of the total adult population in Nigeria were financially excluded by the end of 2020. This figure is pretty above the revised National Financial Inclusion Strategy targets of 20% for the aforementioned period.

As the Central Bank of Nigeria (CBN) targets a 95 per cent financial inclusion rate of Nigerians going into 2024, there is no gainsaying that the Nigerian banking industry in collaboration with other critical stakeholders like the telecommunications sector need to do more.

To scale up the financial inclusion drive, some experts have tasked critical stakeholders to leverage on mobile technology in providing cost-saving digital products to underserved or financially excluded population, especially those residing in rural areas, at affordable prices and on time.

 

As one of the critical stakeholders, based on its position as one of the leading deposit money banks in the country, Fidelity Bank of Nigeria Plc, has constantly lived up to expectations by rolling out digital customer-friendly innovations. Some of these digital innovative products include; Fidelity Insight, Fidelity Virtual Cards, the Pay Yourself Initiative for Corporates, the Fidelity Loan Against Turnover (FLOAT), among others.

It will be recalled that following her assumption of office as the bank’s MD/CEO in January 2021, Mrs. Nneka Onyeali-Ikpe announced a seven-point agenda hinged on innovation, brand refresh, workforce transformation, service excellence, digital transformation, performance discipline and accelerated growth all targeted at propelling the bank to tier one status by 2025.

Have these efforts paid off?

Data from its recent Half Year 2021 results seem to suggest that the bank’s effort in developing these innovative digital services is beginning to pay off.  According to the Managing Director/CEO of the Bank, Mrs Nneka Onyeali-Ikpe; ‘’Digital Banking gained further traction as we now have 55.1% of our customers enrolled on the mobile/internet banking products and 89.3% of customer-induced transactions were done on digital platforms.’’

In addition, it is pertinent to note that income from the digital banking segment contributed about 49.4% to the firm’s Non-Interest Revenue which grew from N18.1 billion to N23.8 billion during the period under review.  Key highlights of the firm’s H1 2021 results are succinctly captured below;

• Gross earnings for the period stood at N112.3 billion.(+6.2% YoY)
• Net interest income of N50.3 billion. (+4.1% YoY)
• Personnel expenses totalled N11.1 billion. (-8.9% YoY)
• Customers deposit at the period stood at N1.98 trillion. (+16.5% YTD)
• Profit for the period was N19.31billion. (+70.8% YoY)
• Earnings per share of 67 kobo Vs 39 kobo YoY.

Commenting on the results, the Managing Director/CEO of the Bank, Mrs. Nneka Onyeali-Ikpe said: ‘’We sustained our impressive financial performance with double-digit growth in profit as increased customer transactions drove non-interest revenue while improved operational efficiency continued to moderate cost – to – serve. This resulted in 72.4% increase in profit before tax to N20.6bn from N12.0bn in H1 2020.

‘’A review of the financial result for the period indicates that Gross Earnings increased by 6.2% YoY to N112.3bn on account of 27.8% growth in Non-Interest Revenue (NIR) to N23.8bn from N18.1bn in H1 2020. NIR was driven by strong growth in Commission on Banking Services (57.7%), Account Maintenance Charges (50.6%), Digital Banking Income (49.4%) and Trade Income (33.7%) etc. as total customer induced transactions across all distribution channels increased by 58.0% YoY and 21.2% QoQ.

“Digital Banking gained further traction as we now have 55.1% of our customers enrolled on the mobile/internet banking products and 89.3% of customer-induced transactions were done on digital platforms¨, Onyeali-Ikpe further explained.

On her projections going forward,  she said: ‘’We look forward to sustaining the current momentum in H2 2021 by optimizing our balance sheet and lowering our cost – to – serve which will translate to improved earnings while we remain committed to our medium to long-term strategic objectives.’’