Fidelity Bank Plc. FY’16 results – Earnings lag consensus estimate, declines 30% YoY

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Fidelity Bank Plc. (FIDELITYBK) FY’16 results – Gross earnings increased slightly by 3.4% to N152.0 billion, in line with our estimate of N147 billion (3.4% deviation). After tax earnings declined by 30.0% to N9.7 billion, behind our estimate and consensus estimate of N11.2 billion and N12.7 billion respectively.
Other highlights :
  • Impairment charges increased by 50.4% to N8.7 billion in FY’16 but declined by 78.1% QoQ to N0.7 billion in Q4’16. Non-performing loans (NPLs) also surged to 6.6% in FY’16 from 4.5% in 9M’16.
  • Operating expenses increased by 4.8% to N67.2 billion due to a N4.8 billion one-off gratuity retirement cost as the bank discontinued its legacy gratuity retirement scheme – discounting this impact, OPEX would have declined by 2.6% and PBT would have grown by 13% (versus the 21.1% decline).
  • Net loans grew by 24.2% to N718.1 billion in FY’16 with Naira devaluation accounting for 79% (N110.9 billion) of the total credit growth.
Total asset and net asset grew by 5.4% and 1% to N1.3 trillion and N185.4 billion respectively. Fidelity bank  declared a dividend of 14 kobo, translating to a dividend yield of 16.7%.
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Further analysis to be released after the bank’s conference call.
Kindly click here for a copy of Fidelity Bank Plc FY’16 results…
(Cardinal Stone Research)