Fidelity Bank improves loan asset quality; grows assets value to GHS 13.7bn
Fidelity Bank per its 2022 Financial Statement posted net assets value of of GHS 13.7bn, an increase from the previous year’s figure of GHS 13.3bn.
Growth in the bank’s assets value was mainly on the account of increment in the bank’s cash and cash equivalents which rose from GHS 2.7bn to GHS 3.4bn in 2021 and 2022 respectively.
Liabilities of the bank within the review period also grew from GHS 12.1bn to 13.1bn driven largely by increments in deposits from customers which accounted for GHS 9.3bn of the total liabilities.
Growth in deposits from customers indicate increment in loanable funds to businesses and individuals and hence growth in interest-income for the bank.
Fidelity Bank for the year 2022 witnessed a marginal improvement in its loan asset quality as its non-performing loans (NPL) declined by 0.42%.
NPLs of Fidelity Bank fell from 8.25% in 2021 to 7.83% in 2022. The slight reduction in the bank’s NPL is an indication that the bank’s new loan recovery strategies are beginning to yield positive results.
Despite the improvement in the bank’s NPLs, Capital Adequacy Ratio (CAR) of Fidelity Bank within the review period decreased from 26.47% in 2021 to 16.79% in 2022. An indication that the bank’s ability or capacity to absorb potential and unexpected losses has been weakened.
The bank’s CAR, despite the reduction, is still well above the BoG’s regulatory 10% minimum CAR requirement for banks operating in the country.
Fidelity Bank for the review year posted net losses of GHS 388m as against the GHS 341m net profit recorded same period in 2021.
The losses by the bank was on the back of the execution of the domestic debt exchange programme by the government given the bank’s exposure to government securities.
The domestic debt exchange programme further led to the bank incurring impairment costs of GHS 1.3bn.
