Fidelity’s profit posted for Q1 2021, according to the bank’s first-quarter unaudited Financial Statement, was Ghs 89.5 million, representing a year-on-year increment of Ghs 20.7 million when compared to the Ghs 68.8 million recorded for Q1 2020.
The year-on-year profit growth was supported by increments in the bank’s net interest income and operating income.
Good management also saw the Bank even within difficult times navigate through the Covid 19 pandemic where individual households and businesses struggled to save or pay back loans, marginally increase its Capital Adequacy Ratio (CAR) by some 1.66 percentage points to 21.73 percent from 20.07 percent in Q1 2021 and Q1 2020 respectively.
Deposits from customers on the other hand grew from Ghs 5.8 billion to Ghs 6.6 billion for the period under review. But deposits from other financial institutions, however, declined from Ghs 321 million to Ghs 289 million.
A look at the first quarter 2021 financial statement carefully, cash and cash equivalents contracted from Ghs 3.9 billion in Q1 2021 to Ghs 1.1 billion in Q1 2020.
Sound investment strategies implemented by the bank’s management, increased the earnings from its investment portfolio, accounting for the growth in profits of the bank year on year.
We can report that there was an improvement in its liabilities for Q1 2021, but Fidelity Bank failed to grow its assets as total assets value recorded for January-March 2021, amounted to Ghs 10.5 billion from the Ghs 11.4 billion recorded for the same period last year.
The Bank between January-March 2020 and January-March 2021, reduced the value of its total liabilities by Ghs 1,071 million.
It’s important to note that, in the banking space, liabilities is often viewed as an ‘asset’ and not a debt due to the fact that, the major component of a bank’s liabilities are deposits made by customers which the bank can in turn use for credit creation by lending the monies out other customers as loans.
Therefore, the good news is that the reduction in the bank’s liabilities was not due to declining in customer deposits but was rather driven down by decreased borrowings by the Bank itself during the period under review.
Borrowings made by Fidelity Bank for the period between Q1 2020 and Q1 2021 fell from Ghs 4.2 billion to Ghs 2.1 billion, a 50 percentage points decrement.
Assets value also declined mainly on the account of a contraction in the bank’s cash and cash equivalents.
Non-Performing (NPLs) for the period under review on the other hand, however worsened, as the bank’s NPL increased by 6.42 percentage points on a year-on-year basis.
