Fidelity Bank eyes capital raise via public offer

Fidelity Bank is setting its sights on a capital raise through a public offer for up to 10 billion ordinary shares and rights issues for up to 3.2 billion ordinary shares. Stanley Amuchie, the bank's Executive Director and Chief Operations and Information Officer, recently appeared on CNBC Africa to discuss the significance of this move and shed light on the bank's half-year earnings report. The numbers revealed a remarkable performance, showcasing a strong growth trajectory under the new leadership. With profit before tax up by 204 percent and profit after tax soaring by 132 percent, it's evident that Fidelity Bank is on a path of robust expansion and profitability. The bank's gross earnings increased to 47 billion, supported by a favorable yield environment and an expansion of earning assets. Notably, the bank's net interest margin improved to 7.2 percent, reflecting a strategic focus on low-cost deposits. Additionally, the deposit mix now comprises 90 percent low-cost deposits, underscoring efforts to reduce the cost of funds and enhance shareholder value. Amuchie pointed out that the bank adopted a proactive approach by increasing its loan loss provision to 16.7 billion in anticipation of potential challenges stemming from FX revaluation. While reaffirming the bank's commitment to prudent financial management, he emphasized the need to plan ahead and fortify the balance sheet. Looking ahead, Fidelity Bank aims to deploy the raised capital towards domestic and international expansion initiatives. The bank recently acquired Union Bank UK, rebranding it as Fidelity Bank UK, marking its foray into the international market. With plans to expand into three African countries within the next year, Fidelity Bank is poised for strategic growth and to serve a wider customer base. The raised funds will be allocated towards enhancing the bank's IT infrastructure to improve customer experience, a key priority for the institution. Moreover, the capital infusion will support lending to small and medium-sized enterprises (SMEs), a segment where Fidelity Bank has established itself as a leading player. The bank's tailored approach to SME lending, coupled with its focus on risk management and business support services, has enabled it to create opportunities for emerging entrepreneurs and contribute to economic development. Amid concerns about non-performing loans in the current economic climate, Amuchie highlighted Fidelity Bank's expertise in assessing and supporting SMEs, emphasizing the bank's commitment to fostering entrepreneurship and sustainable growth. He underscored the importance of financial intermediation and the bank's role in facilitating access to credit for the real economy. As Fidelity Bank embarks on its capital raise journey, the institution remains steadfast in its mission to drive inclusive growth, support business expansion, and strengthen its position both domestically and internationally.