Focus for the week: Fidelity Bank FY’24 Earnings Release – Robust growth in core earnings and operational efficiency

Fidelity Bank delivered a stellar FY’24 performance, with gross earnings surging by 90% y/y to N1.1 trillion (Vetiva estimate: N1.0 trillion), up from N580.6 billion in FY’23. This was primarily driven by a 107% y/y increase in core banking income to N950.6 billion (Vetiva estimate: N843.6 billion), supported by strong growth in interest income from loans and advances (N626.3 billion) and other interest income (N147.5 billion). Interest expenses also rose significantly by 76% y/y to N320.8 billion (Vetiva estimate: N350.2 billion), from N182.2 billion in FY’23.

Improved asset quality drives operational efficiency
Non-interest revenue also grew by 31% y/y to N143.4 billion, supported by a 58% y/y increase in fee and commission income, alongside a 136% y/y surge in trading income. However, overall growth was partially offset by a 69% y/y decline in other income to N14.5 billion (FY’23: N46.7 billion), largely due to a significant drop in FX revaluation gains. Nonetheless, total operating income doubled, rising by 100% y/y to N773.1 billion (FY’23: N386.6 billion).
On the cost side, operating expenses rose by 70% y/y to N331.5 billion (FY’23: N194.9 billion), driven by a 40% y/y increase in staff costs and an 81% y/y jump in other operating expenses. Despite the steep rise in expenses, revenue growth outpaced cost escalation, resulting in a notable enhancement in cost efficiency, with the cost-to-income ratio (CIR) improving to 50% from 68% in FY’23. Additionally, loan loss provisions moderated slightly by 16% y/y to N56.4 billion (FY’23: N67.4 billion), thus driving COF down to 5.3% (FY’23: 6.8%). Overall, the Bank delivered a strong bottom-line performance, with profit after tax (PAT) surging by 180% y/y to N278.1 billion (FY’23: N99.5 billion), driven by solid revenue growth and improved operational efficiency.
What shaped the past week?
Equities: The Nigerian equities market closed the week in the red as bearish sentiment persisted across several sectors. The ASI declined w/w by 32bps to 104,233.81 pts, mirroring the downturn in investor sentiment. The Banking sector was the week’s major laggard, plunging 5.43% w/w, driven by heavy selloffs in GTCO (-13.24%) and ZENITHBANK (-11.91%), which were among the top five decliners. The Insurance sector also came under pressure, falling 2.34% w/w, led by notable selloffs in INTENEGINS (-9.76%) and MBENEFIT (-9.56%), which dragged the sector further into negative territory. Conversely, the Consumer Goods sector staged a rebound, rising 2.33% w/w after last week’s -0.61% decline. Key contributors to the uptick included NB (+13.13%) and UNILEVER (+9.65%). The Industrial Goods sector posted a flat performance, recording a 0.00% w/w change, similar to the previous week’s marginal loss of -0.26%. The Oil and Gas sector saw modest recovery, inching up 0.20% w/w, recovering some of last week’s -0.50% decline. The recovery was largely underpinned by OANDO, which advanced 2.58% w/w, offsetting prior losses in the sector.

Fixed Income: System liquidity started the week positive at N290 billion but tightened sharply, closing at a deficit of N103 billion by Thursday. Meanwhile, the Open Repo Rate (OPR) rose sharply, increasing from 26.58% to 31.60%, reflecting the impact of tighter liquidity conditions in the interbank market. In the secondary market, mild bullish sentiment was observed in the OMO segment, while the NTB space experienced a mixed tone between trading days. Nonetheless, demand remained relatively strong overall, leading to notable yield compressions. The 3M and 1Y NTB yields declined by 593bps and 462bps, respectively, while the 6M bill posted a modest 33bps drop, reflecting selective interest across the curve. The bond market remained largely quiet this week, with overall activity subdued amid a bearish undertone. Despite the cautious sentiment, buy-side interest resurfaced in the 5Y benchmark bond, where yields declined sharply by 467 bps w/w, settling at 19.32%.

Currency: The naira appreciated by 0.24% in the NAFEM market this week, closing at N1,599.9/$1—up from the previous rate of N1,603.78/$1.
Domestic Economy:
Nigeria’s headline inflation rate climbed to 24.23% in March 2025, up from 23.18% in February, reflecting continued pressure on consumer prices and household incomes. The month-on-month inflation rate also rose to 3.90%, signalling an acceleration in price increases. According to the National Bureau of Statistics (NBS), the surge was driven by rising costs of both food and non-food items, with food inflation reaching 21.79% y/y and 2.18% m/m, up from 1.67% in February. Key contributors included staples such as ginger, garri, Ofada rice, natural honey, and fresh pepper, amongst others, highlighting the growing strain on consumers amid stagnant wages and economic uncertainty. Additional inflationary pressure came from seasonal demand during the Ramadan festive period and increased PMS prices following the end of the naira-for-crude oil swap policy.
Global: The U.S. equity markets ended the holiday-shortened week on a mixed note, with major indexes trending lower. The DJIA declined 2.66% w/w to close at 39,142.23pts, while the S&P 500 slipped 1.50% w/w to 5,282.70pts. The Nasdaq Composite also ended the week in negative at 2.6% to 16,286.45pts, reflecting a broad pullback across sectors. Fed Chair Jerome Powell’s comments added to market concerns, as he warned that unexpectedly large tariff increases could lead to higher inflation and slower growth. He also indicated that the Fed would adopt a wait-and-see approach to policy changes, dampening hopes for near-term rate cuts. European markets rallied over the week ended April 17, with the STOXX Europe 600 Index climbing 3.93%, recouping part of April’s earlier losses. The rebound was fueled by two key developments that lifted investor sentiment: a delay in U.S. tariff hikes by President Trump and fresh signals of monetary policy easing from the European Central Bank (ECB). This mix of dovish monetary signals and easing geopolitical concerns helped drive gains across major European indexes this week: Italy’s FTSE MIB surged 4.97%; the UK’s FTSE 100 added 4.58%; Germany’s DAX rose 3.13%; and France’s CAC 40 advanced 2.24%.
Furthermore, headline inflation in the UK eased to 2.6% in March, down from 2.8% in February, driven by lower prices for gasoline. At the same time, official data showed signs of softening in the labour market, though wage growth continued to hold up strongly. Japanese equities posted solid gains for the week ended Thursday, with the Nikkei 225 rising 3.41% to settle at 34,730.28pts. Market sentiment improved later in the week amid signs of progress in U.S.-Japan trade talks, as Japan pushed for a review of existing tariffs and sought more favourable trade terms.

What will shape markets in the coming week?
Equity market: With the market heading into the Easter break, we anticipate a subdued start to the next session, as trading activity typically slows after the holidays. Although the banking sector posted losses this week, signs of a potential rebound could help support sentiment, especially alongside continued strength in select consumer goods stocks. Nonetheless, the generally weak buy-side turnover observed throughout the week may keep overall risk appetite muted in the near term.

Fixed Income: Following the Easter holiday break, next week is expected to open on a cautious note amid sustained liquidity tightness and elevated interbank rates. The ₦400 billion NTB auction on Wednesday will likely see aggressive bidding at higher stop rates, particularly on shorter tenors, which could push yields slightly higher.