Banking
Fidelity Bank Expects Lower FX Income, NIM in H1 2020
By Dipo Olowookere
Fidelity Bank Plc has said it is not expecting to get higher foreign exchange (FX) income in the second half of 2020.
This disclosure was made by the financial institution during its analyst call last week in Lagos, where the MD/CEO of the company, Mr Nnamdi Okonkwo, also stated that much is not anticipated from the net interest margin (NIM) for the rest of the financial year.
Business Post reports that the NIM measures the difference between the interest income generated by a bank and the amount paid as interest to other banks. The NIM mainly shows how well a lender utilises its assets to produce profit.
“We do not expect to have the same level of FX income coming through in Q3 and Q4,” the bank executive informed participants at the conference monitored by Business Post.
According to the audited results of Fidelity Bank for the first half of the year ended June 30, 2020, the FX income grew significantly by 84.8 per cent to N4.5 billion from N8.3 billion.
This was due to the significant 223.4 per cent increase in the FX income recorded in the second quarter of the year; N6.4 billion in Q2 2020 versus N2.0 billion in Q1 2020 and the second quarter rise was largely due to the currency devaluation by the Central Bank of Nigeria (CBN).
It was observed that between April 2020 and June 2020, the significant growth in the FX income of Fidelity Bank contributed largely to the 120.6 per cent growth in its net fee income of N12.6 billion versus N5.7 billion recorded in Q1 2020.
Speaking on the NIM, the Chief Operations and Information Officer of Fidelity Bank, Mr Gbolahan Joshua, stated that though there was an improvement to 6.4 per cent in H1 2020 from 6.2 per cent in FY 2019, the lender is not expecting this to go higher for the rest of the year.
However, he said the management expects the recent downward review of savings rate to have about 0.20 per cent positive impact on the bank’s NIM.
He attributed the 6.4 per cent improvement in the H1 2020 NIM to the 2 per cent decline in “average funding cost despite a drop in yields on earnings assets.”
It was stated that during the first half of the year, the drop in average funding cost was due to a combination of 2.7 per cent decline in the average cost of deposits to 4.0 per cent and 0.40 per cent drop in average borrowing cost to 5.1 per cent.
“The NIM is still strong at 6.4 per cent as at H1 but we think it is still going to go down slightly as we get into H2,” Mr Joshua said at the call.
In terms of its expenses, the bank said it expects a lower OPEX because, according to the CEO, Mr Okonkwo, “we have taken the AMCON cost in full in H1. This means we will be free of any AMCON charge for the rest of the year.”
By December 2020, Mr Okonkwo will be retiring as the MD/CEO of Fidelity Bank, while Mrs Nneka Onyeali-Ikpe is expected to take over from January 2021.
By Aduragbemi Omiyale
The Central Bank of Nigeria (CBN) has reaffirmed that the old and new Naira notes will continue to be used for financial transactions in the country beyond December 31, 2024.
There had been rumours that the old and redesigned N200, N500, and N1,000 banknotes would no longer be legal tender from Wednesday, January 1, 2025, because the central bank would phase out the notes in compliance with a Supreme Court judgement of November 29, 2023.
But the apex bank, in a statement signed by its acting Director of Corporate Communications, Mrs Hakama Ali, on Friday, clarified that the apex court’s judgement being cited did not authorise the bank to phase out the banknotes by the end of this year.
According to her, the court allowed the CBN to leave the old and new notes to be used concurrently until it decides to gradually phase out the former.
The central bank’s spokesperson urged members of the public to disregard claims suggesting the old series of these denominations would cease to be valid at the end of this year.
She urged them to continue to accept all Naira notes for daily transactions, encouraging banks to also adopt alternative payment methods such as electronic channels to reduce the pressure on physical cash usage.
“The Central Bank of Nigeria (CBN) has observed the misinformation regarding the validity of the old N1000, N500, and N200 banknotes currently in circulation.
“In line with the bank’s previous clarifications and to offer further assurance, the CBN wishes to reiterate that the subsisting Supreme Court ruling granted on November 29, 2023, permits the concurrent circulation of all versions of the N1000, N500, and N200 denominations of the Naira indefinitely.
“For the avoidance of doubt, all versions of the naira, including the old and new designs of N1000, N500, and N200 denominations, as well as the commemorative and previous designs of the N100 denomination, remain valid and continue to be legal tender without any deadlines,” the statement noted.
By Adedapo Adesanya
Access Bank Plc, the banking subsidiary of Access Holdings Plc, has entered into a binding agreement with South African-based Bidvest Group Limited for the acquisition of 100 per cent equity stake in Bidvest Bank Limited.
The deal for the 24-year-old South African lender is due to be completed in the second half of 2025, upon regulatory approval.
This shows Access Bank’s further expansion plans in line with goals set by its late founder, Mr Herbert Wigwe.
The agreement to acquire 100 percent stake in Bidvest Bank reflects Access Bank’s commitment to strengthening its footprint in South Africa and consolidating on its position as the continent’s gateway to global markets as it seeks to optimise the benefits of recent acquisitions and accelerate its transition towards a greater focus on efficiencies.
Bidvest Bank, founded in 2000 is a niche and profitable South African financial institution providing a diverse range of services, including corporate and business banking solutions and diverse retail banking products.
As of its year ended June 2024, Bidvest Bank reported total assets equivalent of $665million and audited profit before tax of $20million.
Upon conclusion of this acquisition, Bidvest Bank will be merged with the bank’s existing South African subsidiary to create an enlarged platform to anchor the regional growth strategy for the SADC region.
This is coming just as the bank opened a new branch in Malta as part of efforts to focus on international trade finance after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
The Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
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