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FIDELITY BANK BEGINS INTERNATIONAL EXPANSION DRIVE

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Fidelity Bank

FIDELITY BANK BEGINS INTERNATIONAL EXPANSION DRIVE

Fidelity Bank

With its half-year 2022 results showing a 20.7 per cent rise in profit after tax year-on-year, Fidelity Bank Plc, which last week announced the planned acquisition of Union Bank UK, is leaving no one in doubt with its readiness to avail itself of the tremendous gains of international presence.

In response to their peculiar needs and ever-changing business environment, commercial banks in Nigeria have continued to raise their scale through deliberate acquisitions and business combinations.

 

 

 

This is because, unlike in the past when the Central Bank of Nigeria (CBN) had to raise the capital threshold, forcing banks to either opt for public offers to raise additional funds or merge with operators with similar visions, it is the competition for the sphere of influence that is driving most mergers and acquisition these days.

Analysts attribute the development to the shrinkage of business opportunities amid the current global economic challenges.

 

 

 

Banking industry watchers said with the keen competition by fintech companies and the rising appetite of consumers of banking products for innovations and risks, there are pressures on banks to leave their comfort zones and respond to these growing needs.

Consequently, banks decided to go for options that are best suited for them including the option of a holding company where they bring their non-banking operations under one umbrella. Others decided to go for acquisitions to create a niche for themselves.

 

 

 

 

 

 

It is under the latter category that Fidelity Bank Plc falls as it announced a business combination with a United Kingdom bank last week.

The bank disclosed that it has entered into a binding agreement for the acquisition of a 100% equity stake in Union Bank UK Plc for which the central bank has issued a letter of no objection.

 

 

 

 

 

The move is seen as an opportunity for Fidelity Bank to optimise its international banking licence and take advantage of the planned business combination with Union Bank UK, which has been offering competitive banking services including personal banking, trades finance, treasury management, and structured trade and community finance, which offers to individual and corporate clients for as far back as 1983.

Although the transaction is subject to the approval of the Prudential Regulatory Authority of the United Kingdom, Fidelity Bank officials said they hope to leverage the gains of the acquisition to improve the bank’s returns to its shareholders and to add value to its current and prospective customers.

 

 

 

 

 

 

Improved Half-Year Result

The news of the planned acquisition came the same week that Fidelity Bank’s half-year result for 2022 made its way to the public domain.

Analysts said with the impressive results, Fidelity Bank has demonstrated the capacity to be competitive in the Nigerian banking industry.

 

 

 

 

According to the unaudited half-year results, the bank posted a profit after tax of N23.307 billion for its 2022 half-year results, representing a growth of 20.72% year-on-year.

In the financials submitted to the Nigeria Exchange Group Limited (NGX), the bank also made significant improvements across key performance indicators.

 

 

 

 

The results indicate that the bank’s gross earnings rose by 37.87% to N154.843 billion from N112.304 billion reported in 2021, driven by a 50% growth in net interest income.

Profit before tax stood at N25.079 billion from N20.628 billion posted in 2021, representing a growth of 21.57%.

 

 

 

 

 

 

Interest and similar income using the effective interest rate method rose by 48.45% from N85.090 billion recorded in the first quarter (Q1) of 2021 to N126.348 billion in the period under review.

Based on the result the Board of Directors under the powers vested in it by Section 426 of the Companies and Allied Matters Act (CAMA 2020), proposed an interim dividend of 10 Kobo per share amounting to N2,896,258,569.20 from Retained Earnings as of 30 June 2022.

 

 

 

 

 

 

 

The Register of Shareholders will be closed on September 13, 2022. The qualification date is September 12, 2022.

On September 20, 2022 dividends will be paid electronically to shareholders whose names appear on the Register of Members as of September 12, 2022, and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their bank accounts.

 

 

 

 

 

The planned acquisition of Union Bank UK signposts the final transition of the former Union Bank of Nigeria Plc to new separate owners. In December 2021, Union Bank’s core investors – Union Global Partners Limited and Atlas Mara –reached a Share Sale and Purchase Agreement (SSPA) with Titan Trust Bank (TTB) for the sale of 89.39 percent of Union Bank’s issued share capital.

The agreement came a decade after the initial investment by the core investors in 2012.

 

 

 

 

 

 

 

Commenting on the bank’s performance in March, the MD/CEO, Fidelity Bank Plc, Nneka Onyeali-Ikpe, said: “Digital Banking gained further traction driven by new initiatives in our retail business and the enhancement of existing digital banking products.

We now have 56.0% of our customers enrolled on the mobile/internet banking products and 90.0% of total customer-induced transactions done on digital platforms with digital banking business contributing 27.6% to net fee income.”

 

 

 

 

 

 

Fidelity Bank is described as a highly capitalised bank with a Capital Adequacy Ratio (CAR) of 19.8% in H1 2022. It successfully acquired and integrated two operating commercial banks (FSB and Manny Bank).

The bank boasts of a strong trade and export business with a diversified portfolio across sectors and market segments. It also has a wide distribution network serving over seven million customers. Today, Fidelity Bank is the only bank of its size in Nigeria with no business operation outside the shores of Nigeria.

 

 

 

 

Value Addition

At an interactive session with some financial journalists in Lagos last week, the bank’s Executive Director in charge of Operations and Information, Mr. Stanley Amuchie, explained that the acquisition aligns with the bank’s short to medium-term aspirations and international expansion drive.

Interestingly, UBUK’s competitive range of banking services includes Personal Banking, Trade Finance, Treasury Management, Structured Trade, and Commodity Finance which it offers to individual and corporate clients.

 

 

 

 

 

 

Listing the attraction in the UBUK, Amuchie said the bank offers a robust range of banking services to customers doing business from and into Africa, including trade finance, personal banking, business banking, treasury services, and commercial lending.

It is going to be a plus for Fidelity Bank to combine business with the UBK which provides extensive trade financing to businesses or individuals, that includes secure tracking of physical risks and events in the chain between importers and exporters.

 

 

 

 

 

 

 

 

Amuchie explained that up till now, what Fidelity Bank does when it needs to satisfy the demand of its Nigerian customers with banking needs in the UK is to work with other banks.

However, with the ongoing acquisition, the bank will not only meet the needs of its customers with ease, but it will also be able to conserve fees that it would have paid to another bank.

 

 

 

 

 

 

 

 

“Union Bank UK provides extensive trade financing to businesses or individuals that includes secure tracking of physical risks and events in the chain between importers and exporters,” he stated, adding that the bank provides transaction and liquidity management services to individuals and businesses, helping clients trade across borders and ensuring timely delivery and collection of payments.

Enhanced Product Offering

According to him, a significant captive business opportunity exists in Fidelity books as well as enhanced product offerings, bundled services, and cross-selling.

 

 

 

 

 

Other low-hanging fruits from the acquisitions include the offer of international banking service support, especially for HNIs in Nigeria, trade finance, and a corresponding banking relationship with Fidelity Bank.

In terms of operation, there is the prospect of cross-border collaboration in sales and client services, while the possibility of shared services will be considered.

 

 

Amuchie also talked about workforce transformation and integration of performance culture by the time the acquisition is fully consummated.

The acquisition also raises the prospect of significant captive business opportunities for UBUK from Fidelity Bank’s existing foreign currency transactions in Nigeria.

 

 

 

 

 

Fidelity Bank is also looking at the possibility of revenue and cost optimisation through cross-selling and shared services.

It is also believed that complementary business operations will enable strong value creation for shareholders and clear benefits for customers, staff, and other key stakeholders.

 

 

 

 

 

Throwing more light on the expectations from the acquisition, Amuchie pointed out that “UBUK will service other subsidiaries of Fidelity Bank under the proposed Holdco structure.

He added that there is potential for stronger customer loyalty and stickiness through integrated financial services and bundled products for diaspora customers and corporate banking clients, etc.

 

 

 

 

 

 

The bank was recently recognised as the Best SME Bank Nigeria 2022 by the Global Banking & Finance Awards. It has also won awards for the ‘Fastest Growing Bank’ and ‘MSME & Entrepreneurship Financing Bank of the Year’ at the 2021 BusinessDay Banks and Other Financial Institutions (BAFI) Awards.

Commenting on the agreement, Onyeali-Ikpe said: “This transaction aligns with our strategic plan of expanding our services touchpoints beyond the Nigerian market and providing straight-through services that meet and exceed the needs of our growing clients.

 

 

 

 

The diverse bouquet and business model of Union Bank UK offer a compelling synergy and we hope to build on the existing capacity to create a scalable and more sustaining service franchise that will support the wider ecosystem of our trade businesses and diaspora banking service

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NEW BPP DG COMMITS TO EFFICIENCY AND STAFF WELFARE FOR IMPACTFUL SERVICE DELIVERY

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NEW BPP DG COMMITS TO EFFICIENCY AND STAFF WELFARE FOR IMPACTFUL SERVICE DELIVERY*

*_…begins review of bureau processes to enhance government procurement systems_*

The Director General of the Bureau of Public Procurement (BPP), Dr Adebowale Adedokun, has outlined his vision to drive efficiency, enhance staff welfare, and reinforce the Bureau’s regulatory mandate in alignment with President Bola Ahmed Tinubu’s renewed hope mandate and his commitment to improving Nigeria’s economy. This was made known during an interactive session with staff of the Bureau at the State House Banquet Hall on November 20, 2024. Dr Adedokun emphasised the urgency of delivering results as well as improving trust in the government procurement system to support President Bola Tinubu’s Renewed Hope Agenda, declaring, “Let us work together to get value for money for Nigeria’s developmental processes and achieve President Tinubu’s mandate of making Nigeria’s economy better.”

Furthermore, in a bid to strengthen operational efficiency, the DG also announced key reforms, including introducing Service Level Agreements for the bureau’s processes ensuring that letters are treated within 3 (three) days, and ensuring reports are completed within 14 (fourteen) days. He also highlighted plans to secure a sustainable budget that would improve the working environment and provide better welfare for staff.

Dr Adedokun firmly stated the Bureau’s resolve to uphold its regulatory integrity under his watch. He warned that officers are prohibited from visiting Ministries, Departments, and Agencies (MDAs) unless on official assignments stressing the need for officers of the Bureau to stay above board. He further declared that contractors are no longer allowed within the Bureau’s premises to ensure that officers can perform their duties without undue interference and influence.

Calling for a collaborative approach, the DG urged staff to embody the Bureau’s regulatory values by adhering to procurement guidelines, avoiding delays, and striving for excellence. “As a regulator, you must be seen to be guided by the procurement process,” he stated. He assured the team of an open-door policy, encouraging innovative ideas that could propel the Bureau to greater heights.

The session also featured a visit from former DG, Engr. Emeka Ezeh, OFR, FNSE, who led the Bureau from 2009 to 2016. Engr. Ezeh commended President Tinubu for appointing Dr Adedokun and urged staff to provide their full support to the new leadership. He encouraged staff to focus on leaving a legacy of excellence, saying, “Work in a way that you will be celebrated wherever you go in life.”

Senior Directors, including Engr. Nasir Bello and Engr. Isaiah Yesufu reiterated the importance of supporting the DG’s vision while emphasizing adherence to the Bureau’s operational guidelines. Staff also welcomed the session, sharing their perspectives on improving the Bureau’s operations and pledging their support for the new leadership.

In a related development, Dr Adedokun sought collaboration with the Presidential Office of Digital Engagement and Strategy (PODES) led by its Head, Mr O’tega Ogra, who is also the Senior Special Assistant to the President on Digital/New Media, during a courtesy visit to his office on November 21, 2024. The DG emphasized the need to enhance the Bureau’s public engagement and visibility in line with the all-of-government communications approach being espoused by the PODES.

Mr Ogra congratulated Dr Adedokun on his appointment and highlighted the key role BPP plays in advancing Nigeria’s development agenda. O’tega further expressed his commitment to collaborating with the Bureau in amplifying its communication efforts and ensuring Nigerians understand and appreciate its critical role in national governance.

Dr Adedokun’s leadership marks a new chapter for the Bureau of Public Procurement, focused on accountability, efficiency, and impactful service delivery. His vision aligns seamlessly with the Federal Government’s goals of economic transformation and sustainable development as well as President Bola Tinubu’s renewed hope agenda.

Janet McDickson
Director, Information & Public Relations/Head, Media-BPP

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Zenith Bank Leads List Of 8 Nigerian Banks With Highest Customer Deposits In 2024

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zenith Bank Leads List Of 8 Nigerian Banks With Highest Customer Deposits In 2024

Eight Nigerian banks experienced an increase in customer deposits, which rose to N85.58 trillion in the third quarter of 2024.

– The increase represents a 12.2% increase, which shows customers confidence in the banking sector

– Zenith Bank led the pack with the highest customer deposits in the review period, with N21.57 trillion.

Customer deposits in eight commercial banks hit N85.58 trillion in the third quarter of 2024, representing a 12.2% increase from the N76.26 trillion recorded in the corresponding period in 2023.

The information is contained in the banks’ unaudited interim financials for the period ended September 30, which they filed with the Nigerian Exchange Limited (NGX).

Breakdown of the banks’ customer deposits

Customer deposit is the money a customer pays into a bank to secure goods or services or to make an advance payment on an order or project.

Zenith Bank recorded the highest customer de-posits at N21.57 trillion in the review period, from the N13.38 trillion recorded in Q3 2023.

The figure is a 61% increase driven by demand deposits, which rose from N7 trillion to N8 trillion.

Access Holdings followed next with N22.28 trillion in customer deposits compared to N15.32 trillion in Q3 2023, representing a 46% yearly increase.

The bank’s demand deposits stood at N9.36 trillion from N6,83 trillion in 2023.

First Bank increased to N16.72 trillion in the review period from N10.66 trillion in the same period in 2023, showing a 57% increase.

The bank’s demand deposits rose to N3.87 trillion, savings deposits reached N4.12 trillion, and term deposits spiked to N8.72 trillion.

Guaranty Trust Bank reported an N10.68 trillion increase in customer deposits under review from N7.41 trillion in the same period in 2023.

Term deposits of the bank rose from N846.09 billion to N1.46 trillion, while savings deposits rose from N3.29 trillion to N4.21 trillion.

Fidelity Bank recorded N6.08 trillion in customer deposits in the review period, relative to N4.01 trillion recorded in Q3 2023, representing a 52% increase, while term deposits rose from N75.99 billion to N309.80 billion.

Sterling Bank recorded customer deposits of N2.46 trillion in the period under review, up from the N1.84 trillion it recorded in the corresponding period in 2023.

The bank’s savings deposits rose from N1.10 trillion to N1.50 trillion, and term deposits stood at N1.23 trillion from N742.12 billion.

Its savings deposits rose from N1.10 trillion to N1.50 trillion, and term deposits increased from N742.12 to N1.23 trillion.

Stanbic IBTC’s deposits swelled to N2.46 trillion from N1.84 trillion in 2023, representing a 34% increase.

The growth was driven by current accounts, which spiked from N1.04 trillion to N1.33 trillion, and savings accounts rose from N337.25 billion to N478.22 billion.

Wema Bank experienced a 23% yearly increase in customer deposits, from N1.86 trillion in 2023 to N2.29 trillion in 2023.

Nigerian banks’ customer deposits explode in 2024

Punch reports that the value of customers’ bank deposits rose to N136 trillion as of March 2024.

Total bank deposits rose by 63%, from N70.5 trillion in 2022 to N115 trillion in 2023, hitting N136 trillion in March 2024, an 18.26% increase in three months.

CBN clarifies position on converting foreign currency

Legit.ng earlier reported that the Central Bank of Nigeria (CBN) had issued new rules clarifying that commercial, merchant, and non-interest banks (CMNIBs) should let holders convert their internationally tradable foreign currency (ITTC) balances in designated domiciliary accounts into the local currency, the naira, at any time, using the prevailing exchange rate.

The bank disclosed that all conversions must be fully disclosed and reported as part of the bank’s exchange rate requirements.

Legit.ng reported that in February 2024, the apex bank reaffirmed that it would not coerce domiciliary account holders to convert their holdings into naira.

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FirstBank Hosts Inaugural China-Africa Interbank Association Forum; reiterates its commitment to promoting trade, financial cooperation and Economic Development.

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FirstBank Hosts Inaugural China-Africa Interbank Association Forum; reiterates its commitment to promoting trade, financial cooperation and Economic Development.

 

FirstBank, the premier West African financial institution and financial inclusion service provider has announced its hosting of the first-ever China-Africa Interbank Association (CAIBA) Forum to strengthen economic ties and investments between China and Africa. The forum, themed “Joining Hands to Advance Modernisation and Strengthening China-Africa Trade, Industrialization and Economic Diversification,” will take place on November 27, 2024, at the Fraiser Suites Abuja.

Established in 2018, CAIBA marked a significant milestone in fostering financial cooperation between China and Africa, comprising 16 African banks, including FirstBank, and China Development Bank (CDB) as well as ABSA Bank, West African Development Bank, Central African States Development Bank, Eastern and Southern African Trade and Development Bank, Development Bank of South Africa, Ecobank, United Bank for Africa, RawBank with the aim to enhance partnerships in various spheres, such as infrastructure interconnection, international cooperation, and cultural exchange. This initiative was driven by the need to address the funding gap in Africa for industrialization, infrastructure, and poverty alleviation.

The CAIBA Forum which will be co-hosted by China Development Bank offers a unique opportunity for knowledge sharing, networking and deal making, for the purpose of fostering a win-win cooperation and promote joint development among member-banks. Formerly convened only in Beijing, the Forum will now provide a unique platform to spotlight Nigeria’s pivotal role in the growing China-Africa economic relationship as the host country.

Intrinsically woven into the fabric of the society and with its extensive network across Sub-Saharan Africa, UK, and China, FirstBank provides unparalleled access to markets, to facilitate trade and investment flows between China and Africa.

Additionally, FirstBank’s expertise in financial inclusion, trade finance, corporate and investment banking positions it as an ideal partner with China Development Bank with key strengths in inclusive and sustainable financial solutions in driving this important initiative to support Chinese and African businesses.

Speaking about the forum, the CEO of FirstBank Group, Mr. Olusegun Alebiosu, said, “We are honoured to host this pivotal event that fosters dialogue and collaboration between Chinese and African financial institutions. This forum reinforces our commitment to bridging the gap between Africa and China, catalyzing economic growth and development. The selection of FirstBank as the host is a testament to our rich legacy, deep expertise in African markets, and an impressive 130-year history of empowering businesses and communities to thrive. We are proud to support the continent’s economic transformation and growth and remain dedicated to exploring the partnership opportunities this forum will bring for the mutual benefit of China and Africa.”

Participants will have the chance to engage with government officials, business leaders, and financial experts from both regions. Expected guest speakers include His Excellency, the Vice President of Federal Republic of Nigeria, the Governor of the Central Bank of Nigeria, Minister of Trade, Industry & Investment, MD of China Development Bank, Federal Capital Territory (FCT) Minister, Governors of Lagos, Kano and Anambra States; Ambassadors from countries of CAIBA members, President and Chairman of the Board of Directors of the African Export–Import Bank, Representatives from the China-Africa Development Fund, and many industry leaders, policymakers, and experts to explore opportunities for cooperation and mutual growth.

In addition, the CAIBA Forum will feature a plenary session which include Dr. Abiodun Adedipe – Founder & Chief Consultant BAA Consult, David Ofosu-Dorte – Senior Partner, AB & David Africa, A Pan-African Law Firm, Ugo (UgoDre) Obi-Chukwu – Publisher Nairametrics, Wole Adeniyi- CEO, Stanbic IBTC, Bamidele Abu- CEO, ABSA Nigeria Capital Markets, Mrs Kouassigan Dovi Eliane Khady – Head Financial Institutions West African Development Bank (BOAD). Other exciting line-ups include a trade exhibition, keynote speeches, and networking events that will explore the latest trends and opportunities in China-Africa cooperation.

The establishment of CAIBA is a positive development that has the potential to significantly impact the economic landscape, actively shaping economic future and fostering partnerships that drive sustainable growth and prosperity of both China and Africa.

 

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