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Fidelity Bank outperforms banks, stock market with 507% gain in 5 years

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6 months ago

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Investors in Fidelity Bank Plc have earned more than 507 per cent in capital gains over the past five years, ranking above all other major return benchmarks at the Nigerian stock market and the entire banking sector.

Trading reports at the Nigerian stock market for the five-year period between May 31, 2019 and May 31, 2024 showed that Fidelity Bank outperformed all key indices at the stock market.

Fidelity Banks share price rose by 507.14 per cent over the period, representing average annual capital gain of 101.43 per cent.

These returns underscore Fidelity Banks immense value as a stock for all times, helping investors to hedge against inflation while preserving significant long-term value.
With 507 per cent capital gain in five years and average annual gain of more than 100 per cent, the return analysis implies that investment in Fidelity Bank is more attractive than other class of assets, including fixed-income securities such as government and corporate bonds; real estate investment and mutual funds among others.

The high divisible nature of shares investment and high free float of Fidelity Bank, which makes the banks shares easily available, underline the bank as a most attractive investment option for all cadres of investors- small, medium and high networth; retail and institutional investors.

Comparative analysis showed that Fidelity Bank outperformed all other major market indices with the banks average annual return for the period twice the average return by the overall market and almost four times of average return in the banking sector.

The All Share Index (ASI) – the common, value-based index that tracks all share prices at the Nigerian Exchange (NGX), which is widely regarded as Nigerias benchmark for equities market, recorded a five-year return of 219.61 per cent, an average annual return of 43.9 per cent.

Contrary to the significantly above average performance of Fidelity Bank, the NGX Banking Index-which tracks the banking sector, doubled by 120.53 per cent over the five-year period, representing average annual return of 24.11 per cent, more than 77 percentage points below Fidelity Banks average return.

Two other major price indices- the NGX 30 Index and NGX Main Board Index, recorded five-year cumulative return of 185.73 per cent and 265.6 per cent respectively, representing average annual gain of 37.15 per cent and 53.1 per cent respectively.

The NGX 30 Index tracks share prices of the 30 largest companies at the stock market while the NGX Main Board Index represents the largest and most diversified group of listed companies at the stock exchange. Fidelity Bank is quoted on the main board, like most other major banks and companies at the stock market.

The average annual return of 101.43 per cent underlines that Fidelity Bank provides substantial return for investors, even where such investors had borrowed money at the ruling interest rate and the invested fund was adjusted for impact of inflation rate.

Nigerias inflation rate peaked at a high of 33.69 per cent in April 2024 while the Central Bank of Nigeria (CBN)s Monetary Policy Committee (MPC) recently increased the Monetary Policy Rate (MPR), otherwise known as benchmark interest rate, to 26.25 per cent.

Fidelity Banks share price, which closed May 31, 2019 at N1.68 per share, rose successively to N10.20 per share by the end of May 2024. The ASI had, during the period, rose from its opening index of 31,069.37 points to close weekend at 99,300.38 points. The NGX Banking Index rose from 361.57 points to 797.37 points. The NGX 30 Index, which opened the period at 1,286.68 points, closed the period at 3,676.44 points. The NGX Main Board Index appreciated from 1,267.54 points to close weekend at 4,634.31 points.

Market analysts are unanimous that share prices are illustrative of the fundamental values of quoted companies.

Managing Director, HighCap Securities Limited, Mr. David Adonri, said the price of any stock in the market is a correct reflection of the market value for the stock.

Managing Director, Globalview Capital Limited, Mr. Aruna Kebira, explained that the market price of a stock represents the disposition of the investing public to the stock at a given period, noting that there should be consideration for both the market value and the book value or fundamentals of a stock.

It could be summarized that the market price of a stock is premised on the psychology of the market, the markets mood as well as market sentiments, Kebira said.

Chief Executive Officer, Sofunix Investment and Communications, Mr. Sola Oni, said the stock market shows both the current and future prospects of shares.

Share price reflects the current value of a company but also reveals the future prospects, Oni said, noting that investment analysts traditionally combine market price and book values to determine the possible outlook of a stock.

Five-year review of the audited reports and accounts of Fidelity Bank showed strong correlation between the banks upwardly share pricing trend and expansive growth in its business operations.

The banks pre-tax profit had risen from N30.35 billion in 2019 to N124.26 billion in 2023, an increase of 309.4 per cent. Net profit after tax also grew by 203.3 per cent from N42.80 billion in 2019 to N129.80 billion in 2023. Earnings per share has risen successively from 98 kobo in 2019 to N3.11 per share in 2023.

The banks balance sheet had expanded by 195.26 per cent from N2.11 trillion in 2019 to N6.23 trillion in 2023, within the fastest growth in the industry. Customers deposits, which underlines the competitive market share, more than tripled from N1.225 trillion in 2019 to N4.01 trillion in 2023, an increase of 227.35 per cent. Shareholders funds had also grown from N234.03 billion to N437.31 billion.
Market pundits expected Fidelity Banks share price continue to rise, citing several factors that illustrated the upside potential for the stock.

Independent investment research reports by many market pundits showed that Fidelity Bank was assigned buy ticker, a recommendation to investors to consider the potential attractive returns of the bank.
The research reports were based on the historical and current operational performances of the bank as well as the clear-sighted implementation of the banks growth plan. The reports also considered the quality of board and management and the general human capital and resources of the bank.

The investment advisory reports included those of Afrinvest Group, FSDH Capital and CardinalStone among others.

Analysts were unanimous that Fidelity Banks share price could double in the period ahead given professional assessment of top traditional performance parameters including the companys operational reports, investors preference and projections.

Already, interim report and account of the bank for the first quarter ended March 31, 2024 showed that the bank started the current business year on stronger footing with three-digit growths across key performance indicators.

The three-month report, released at the NGX, showed that gross earnings increased by 89.9 per cent to N192.1 billion in first quarter 2024.

The banks top-line performance continued to be driven by broad-based growths across income lines with interest income rising by 90.7 per cent and non-interest income growing by 84 per cent in first quarter 2024.
Growth in interest income was primarily spurred by a higher yield environment and strong earning assets base, while the increase in non-interest income was led by double-digit growth in account maintenance charges, foreign exchange (forex)-related income, trade, banking services, and remittances, supported by increased customer transactions.

Profit before tax doubled by 120 per cent to N39.5 billion in first quarter 2024 as against N17.9 billion in first quarter 2023. The banks performance was driven by expanding market share with total deposit rising by 17 per cent within the three months to N4.7 trillion, compared with N4 trillion recorded at the end of 2023. The bank also increased its supports for national economic growth with net loans and advances rising by 21 per cent from N3.1 trillion at the end of 2023 to N3.7 trillion by March 2024.

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Banking and Finance

Ecobank Design and Build Expo: Experts Advocate Green Building for Sustainable Financing

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1 week ago

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December 2, 2024

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Lagos, December 1, 2024 – Industry professionals in the building and construction sectors have been encouraged to adopt green building practices as a means to secure sustainable financing for large-scale projects. This was the key takeaway from experts who spoke at the Ecobank Design and Build Expo in Lagos last week.Green building, or sustainable building, refers to the design and construction of structures that prioritize environmentally responsible and resource-efficient processes throughout their lifecycle—spanning planning, design, construction, operation, maintenance, renovation, and demolition.Bolaji Balogun, Chief Executive Officer of Chapel Hill Denham, emphasized the importance of sustainable practices during his presentation on “Sustainable Financing.”

Bolaji Balogun, Chief Executive Officer, Chapel Hill Denham

He highlighted that projects with an environmentally-friendly focus are more likely to attract lower-cost capital both locally and internationally. He also pointed out that multinational companies are increasingly seeking buildings with EDGE (Excellence in Design for Greater Efficiencies) certification.He explained, “The world is shifting towards green buildings. These buildings attract cheaper capital, both domestically and abroad. Large organizations now prefer EDGE-certified buildings, which offer environmental features like low carbon footprints, energy efficiency, and reduced operating and maintenance costs.”Balogun also mentioned other sources of sustainable financing, such as Sukuk, blue financing, and gender financing.

Godwin Tapela, Senior Investment Officer, International Finance Corporation

He encouraged organizations to explore capital and bond markets to secure funding.Godwin Tapela, Senior Investment Officer at the International Finance Corporation (IFC), spoke about the EDGE certification system, which was developed by the IFC to minimize the environmental impact of the building sector, particularly in emerging markets. He emphasized the corporation’s ongoing efforts to promote awareness of the importance of eco-friendly, sustainable buildings.Tapela also reaffirmed that the IFC remains committed to providing sustainable financing solutions, especially for developers of green buildings and affordable housing.The five-day Ecobank Design & Build Expo, themed “Building Nigeria Together,” took place from November 27 to December 1, 2024, at the Ecobank Pan African Centre (EPAC) on Victoria Island, Lagos. The event featured around 60 exhibitors showcasing their latest products and innovations in architecture, construction, building materials, household appliances, engineering, and interior design.A highlight of the expo was a visit from former President Chief Olusegun Obasanjo GCFR, who toured the various pavilions, which displayed cutting-edge trends, innovations, and sustainable practices. He praised the exhibitors for the high quality of their work.Prominent global brands participating in the expo included SABA Steel, Nigeria’s largest steel manufacturer; Coleman Wire & Cables, the leading cable producer in West Africa; Donna Spectre, a major player in indigenous oil and gas logistics; Dulux Paints, a top paint brand in Nigeria; HTL Africa, an innovative architectural firm; ITB Nigeria Limited, a major construction company in Nigeria and West Africa; and Mota Engil Nigeria, a leading civil construction company.

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Banking and Finance

Wema Bank awards N145 million to Seven Outstanding Innovators At The Hackaholics 5.0 Grand Finale.

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1 week ago

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November 29, 2024

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Wema Bank, Nigeria’s most innovative bank and pioneer of Africa’s first fully digital bank, ALAT, has successfully concluded the 5th edition of its Hackaholics initiative, a premier ideathon designed to empower and support the nation’s brightest tech innovators. The grand finale, which took place recently in Lagos, witnessed a remarkable showcase of ingenuity and problem-solving prowess, culminating in seven startups sharing an impressive N145 million in prize money—nearly double the initial prize fund of N75 million.This year’s Hackaholics stood out with a record-breaking 3,500 applications from across Nigeria. From this pool, 10 finalists showcased innovative solutions addressing real-world challenges, ranging from education accessibility to sustainable agriculture, healthcare, and more.Feegor, the overall winner, was awarded the top prize of N50 million for its innovative B2B wholesale marketplace and SaaS platform. Feegor empowers SMEs to discover, negotiate, and source goods from verified suppliers while accessing credit through a Buy Now Pay Later (BNPL) model. This groundbreaking approach is set to drive growth and create significant economic impact.The first runner-up, Empayment AI, received N35 million for its AI-powered invoice discounting platform, revolutionizing how businesses manage payments. Bloom Beauty, the second runner-up, was awarded N20 million for its personalized, AI-curated solutions that are transforming the beauty industry.In the women-led category, MyTherapist secured the position of first runner-up, earning N12 million. MyTherapist connects users with mental health professionals, providing accessible and affordable therapy solutions for emotional well-being. Meanwhile, MyItura, an innovator delivering remote healthcare services, clinched the position of second runner-up in the women-led category, receiving N8 million.Both Northino and University X earned honorable mentions at the grand finale, each receiving N10 million. Northino was recognized for bridging traditional knowledge and modern technology through digital skills training for African native speakers, while University X impressed with its transparent, all-encompassing platform for tertiary education management.The significance of these groundbreaking innovations was highlighted by Wema Bank’s CEO, Moruf Oseni, who shared his vision for the initiative. In his words, “We are delighted to celebrate the brilliance of our youth through the Hackaholics initiative. At Wema Bank, we are more than a bank; we are enablers of dreams and drivers of transformation. When I stood here earlier, the total prize money was N75 million. But, inspired by the potential we saw, we decided to increase the total prize pool to N145 million. Wema Bank’s legacy of 79 years remains rooted in innovation, and with initiatives like Hackaholics, we continue to empower lives and shape the future.”Ugonna Ginigeme, CEO of Feegor and the overall winner, expressed heartfelt gratitude for the recognition and support. “I feel very grateful to God, my team, and everyone who has been part of this journey. Winning among so many great startups and entrepreneurs is humbling. I sincerely thank the MD, Wema Bank, and its management for this incredible opportunity. These are still early days, but we are determined to keep working, building, and creating a positive impact for SMEs and the Nigerian economy while building an all-around successful company.” Ginigeme said.Hackaholics 5.0 not only underscores Wema Bank’s legacy of innovation but also sets the stage for further technological advancements, fostering a generation of problem-solvers poised to reshape Nigeria’s future.

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Banking and Finance

Wema Bank Unveils Top 35 Innovators Advancing to the Grand Finale Pitch of Hackaholics 5.0

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2 weeks ago

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November 25, 2024

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Wema Bank, Nigeria’s innovative leader in banking and pioneer of Africa’s first fully digital bank, ALAT, has officially announced the 35 exceptional teams advancing to the grand finale pitch of Hackaholics 5.0. The grand finale pitch is set to hold on November 25, 2024, in Lagos, themed “Meta Idea: Catalyzing Africa’s Growth Through Innovation.”
After a series of competitive pre-pitch events at eight physical locations and one virtual pitch center, 35 outstanding teams have emerged as top contestants. These teams represent diverse and impactful ideas, ranging from tech solutions in agriculture, finance, and education to innovations in healthcare, sustainability, and artificial intelligence.
The top contestants include: Northino, Our Haven, Celia, Nadir, Nimsy Agro, Hebron Chain, Paystrait, DevMe, Preview, Coconoto, EduGaze, Dokia, Gbale Prime, Health 4 Moni, Digiland, Abinci, Unifi, CyclexAfrica, Airify, Kwab, Gnergy, University X, AI Teacha, Code Red, APISentry, Fegor, TrashCoin, Paywise, Pandascrow, Lexia AI, Bunce, Bloom Beauty, MyItura, Accede, Scratop Nigeria Limited.
The grand finale pitch will see these top contestants pitch innovative Digi-Tech solutions to a panel of esteemed investors, industry leaders, and mentors competing for ₦75 million worth of prizes. The prize structure includes a whopping ₦30 million worth of prizes for the grand prize winner, ₦20 million worth of prizes for the first runner up, ₦15 million worth of prizes for the 2nd runner up, and ₦10 million worth of prizes for the top women-led team.
Moruf Oseni, MD/CEO of Wema Bank, expressed his excitement about the competition’s impact:
“Hackaholics is a testament to Wema Bank’s commitment to fostering innovation and youth empowerment.” These 35 top contestants represent the future of Africa’s tech-driven transformation, and we are proud to provide them with a platform to bring their ideas to life. The Meta Idea theme challenges them to think beyond immediate solutions and focus on innovations that capitalize on Africa’s growth potential. We look forward to celebrating their ingenuity at the grand finale.”
This year’s Hackaholics competition received thousands of applications from across Nigeria, highlighting the creativity and determination of young tech enthusiasts. The competition has inspired groundbreaking solutions aimed at addressing Africa’s challenges and driving digital transformation. It underscores the role of technology and entrepreneurship in Africa’s socio-economic progress and remains a key platform for discovering and nurturing young talents, offering winners mentorship, networks, and resources to scale globally.
To attend the Hackaholics 5.0 grand finale and witness the next generation of innovators in action, register at https://hackaholics.wemabank.com/grandfinale.

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