NGX gives insight on why it reclassified Fidelity Bank stock at Exchange
The management of the Nigerian Exchange Limited (NGX) has provided explanations on why it recently reclassified the bank’s stock from small to medium stock.
A statement by Joseph Kadiri, Media Relations, Corporate Communications of the NGX, said the reclassification became imperative because the Bank’ shares have been trading above the N5.00 mark since February 2023.
“Rule 15.29 of the Rulebook of The Exchange, 2015 (Dealing Members’ Rules) notes that equities priced above N5 per share for at least four of the most recent six months of trading, or new security listings priced above N5 per share at the time of listing on NGX are classified as medium price stock,” the statement said.
“According to NGX, Fidelity Bank Plc traded above the N5.00 mark on 20 February 2023 and has remained above the N5 mark up until close of business on 30 June 2023.
“This indicates that FIDELITYBK has been trading above N5 for at least four months in the last six months. Therefore, it should be reclassified from small price stock to medium price stock.”
Business Hilights recalls that the bank released its audited financial statement and accounts to the investing public.
A key aspect of the report was a recommendation of a 42.9 per cent increase in dividend payout by the board of directors of the bank.
In one of the highest return growths in the stock market, Fidelity Bank, which set a personal record with its first interim dividend in 2022, increased cash dividends payable to shareholders for the 2022 financial year from N10.137 billion in 2021 to N15.7 billion in 2022.
According to regulatory filing at the NGX, shareholders, who received interim dividend of 10 kobo per share earlier in 2022, received a final dividend per share of 40 kobo, totaling a payout of 50 kobo for the 2022 business year as against 35 kobo paid for the 2021 business year.
According to the audited statement and accounts for the year ended December 31, 2022 profitability doubled and was driven by strong growths in the top-line and the structural balance of the bank’s operations.
For instance Gross earnings rose by 34.4 per cent in 2022 to N337.05 billion as against N250.78 billion in 2021.
Segmental topline analysis showed that the bank’s performance was driven largely by its core commercial banking operations.
Gross interest income rose by 45.2 per cent from N203.57 billion to N295.58 billion, representing 87.7 per cent and 81.2 per cent of gross earnings in 2022 and 2021 respectively.
After interest expenses, net interest income stood at N152.70 billion in 2022 compared with N94.88 billion in 2021, an increase of 60.94 per cent.
Total operating expenses stood at N120.78 billion in 2022 as against N96.31 billion in 2021, an increase of 25.4 per cent; lagging behind top-line growth.
Also, expenses were driven by more than a quarter growth in other non-personnel operating expenses, reflecting the impact of spiraling hyperinflation that characterised the 2022 business year.
After taxes, net profit rose from N23.10 billion to N46.72 billion, an increase of 102.2 per cent. With these, earnings per share rose correspondingly from 80 kobo in 2021 to N1.61 in 2022.
Total assets hit the N4 trillion mark at N3.99 trillion in 2022 as against N3.28 trillion in 2021, an increase of 21.65 per cent. Customer deposits, which underlines public acceptance and market status, grew by 27.7 per cent from N2.02 trillion to N2.58 trillion.
Meanwhile, Managing Director and Chief Executive Officer, Fidelity Bank Plc, Mrs Nneka Onyeali-Ikpe said the 2022 performance reflected the bank’s continuing focus on its execution strategy, despite global and national macroeconomic headwinds.
