Fidelity Bank Plc delivered a mixed financial performance for the 2025 financial year as strong revenue growth and foreign exchange gains failed to offset mounting operating costs, elevated funding expenses, and a reversal in derivative positions that pressured profitability.
The bank’s audited full-year results showed that gross earnings rose strongly by 45.65 per cent to N1.52 trillion, up from N1.04 trillion recorded in 2024, reflecting continued expansion in core banking activities amid Nigeria’s high-interest-rate environment and persistent foreign exchange volatility.
Interest income remained the major driver of revenue growth, climbing by 36.60 per cent to N1.30 trillion from N950.59 billion in the previous year.
Fee and commission income also expanded, rising by 44.67 per cent to N113.36 billion, while foreign exchange income surged sharply by 749.91 per cent to N99.58 billion from N11.72 billion in 2024, highlighting the growing earnings contribution from currency-related transactions during the period.
Despite the robust topline performance, profitability weakened as rising funding costs and derivative losses eroded earnings momentum.
Interest expenses increased by 45.62 per cent to N467.17 billion as elevated monetary policy rates and intense competition for deposits continued to raise the cost of funds across the banking sector.
The pressure was compounded by a derivative loss of N223.79 billion, compared with a derivative gain of N57.88 billion recorded in the previous year, significantly impacting overall earnings performance.
As a result, profit before tax declined by 9.75 per cent to N347.66 billion from N385.21 billion, while profit after tax fell by 12.82 per cent to N242.44 billion compared with N278.11 billion posted in 2024.
Basic earnings per share also moderated to N5.80 from N6.52 recorded in the prior year.
The performance reflects the increasingly difficult operating environment confronting Nigerian banks, where strong income growth is being challenged by inflationary pressures, elevated interest rates, foreign exchange adjustments, and rising operating expenses.
Operating costs remained a major pressure point for Fidelity Bank during the review period.
Total operating expenses rose by 33.74 per cent to N443.33 billion from N331.48 billion in 2024, driven by higher staff costs, inflation-linked administrative expenses, and increased depreciation charges.
Staff expenses climbed by 9.68 per cent to N80.56 billion, while depreciation and amortisation costs rose by 79.26 per cent to N27.49 billion.
Other operating expenses also rose sharply by 38.15 per cent to N335.29 billion.
The rise in operating costs pushed the bank’s cost-to-income ratio higher to 54.6 per cent from 42.9 per cent in the previous year, reflecting growing efficiency pressures within the institution’s operations.
Profitability indicators weakened moderately during the year.
Return on Equity (ROE) declined to 22.29 per cent from 31.0 per cent, while Return on Assets (ROA) eased to 2.3 per cent from 3.2 per cent.
However, the bank maintained relatively strong balance sheet growth and improved capital positioning despite the earnings slowdown.
Total assets expanded by 18.61 per cent to N10.46 trillion from N8.82 trillion, supported largely by a 44.87 per cent increase in investment securities to N2.63 trillion and a 29.66 per cent rise in cash and cash equivalents to N2.97 trillion.
Shareholders’ funds also strengthened by 21.13 per cent to N1.09 trillion, indicating improved capital resilience during the financial year.
The lender, however, adopted a more cautious lending posture amid prevailing macroeconomic uncertainties, as loans and advances declined slightly by 2.40 per cent to N4.28 trillion.
Analysts say the moderation in lending reflects broader banking sector caution amid inflationary risks, rising credit costs, exchange rate uncertainties, and tighter liquidity conditions within the economy.
Although impairment charges declined by 61.71 per cent to N21.61 billion, the improvement was insufficient to offset the broader earnings pressures linked to derivatives and operating costs.
Investor sentiment toward the stock weakened following the results announcement.
Fidelity Bank’s share price declined by 0.68 per cent on Tuesday as investors reacted to the softer bottom-line performance and the board’s decision not to declare a dividend for the financial year.
Market analysts note that while the bank’s revenue expansion and capital growth remain positive indicators, concerns around profitability sustainability, rising cost structures, and earnings quality may continue shaping investor sentiment in the near term.
