Business
Who is afraid of Fidelity Bank?
Who is afraid of Fidelity Bank?
A lot of mischief is going on in the banking sub-sector of Nigeria’s financial ecosystem since the Central Bank of Nigeria (CBN), on June 3, 2024, revoked the banking licence of Heritage Bank Plc.
The not-so-subtle campaign by some faceless groups to demarket an otherwise solid financial institution like the Fidelity Bank Plc., however, has not escaped the attention of discerning banking publics. But it is a mischief taken too far.
In revoking the banking licence of Heritage Bank, the CBN made it clear that its board and management have been unable to improve the bank’s financial performance, a situation which the country’s apex bank says constitutes a threat to the country’s financial stability.
A statement by Mrs. Hakama Sidi Ali, Ag. Director, Corporate Communications of the CBN, said it acted in accordance with its mandate to promote a sound financial system in Nigeria and in exercise of its powers under Section 12 of the Banks and Other Financial Act (BOFIA) 2020.
Many Nigerians, particularly those abreast of the goings on in the banking industry did not raise any eyebrows at the news of the revocation and subsequent appointment of the Nigeria Deposit Insurance Corporation (NDIC) as the liquidator.
But since then, mischief makers have been bandying the names of other banks – Fidelity Bank, Wema Bank, Polaris Bank and Unity Bank – that will go the Heritage way. To make their spurious claims seem real, they recirculated a circular issued by CBN on January 10, 2024, notifying the public about the dissolution of the Boards of Union, Keystone, and Polaris banks as though it was issued on June 10, 2024.
And even when the CBN, while insisting that the case of the now defunct Heritage Bank was an isolated one, stated unequivocally that allegations of further revocation of licences prior to the completion of the bank recapitalisation exercise were mere fabrications of those who didn’t wish the banking sector well, such insinuations have persisted.
But the question that continues to concentrate the minds of many Nigerians is: Why Fidelity Bank? Of course, the question is pertinent because even if the January 10 notification memo dissolving the boards of Union, Keystone and Polaris banks is taken to mean that the banks were in trouble, Fidelity Bank was not one of them.
It is, however, instructive that this mischief has become more strident in the last one week since Fidelity Bank signed the necessary documentation to raise about N127.1 billion from a public offer and rights issue to its existing shareholders to raise its capital base in line with the CBN’s fresh capitalisation directive.
The bank is eyeing N97.5 billion fresh funds from its public offer and N29.6 billion from its rights issue which offers existing shareholders one new ordinary share for every 10 ordinary shares held as of January 5, 2024, at N9.25 per share. For the Public Offer, 10,000,000,000 ordinary shares of 50 kobo each will be offered to the general investing public at N9.75 per share when the acceptance and application lists for the rights issue and public offer open on Thursday, June 20, 2024.
Speaking at the signing ceremony which held at the board room of the bank’s head office in Lagos on Wednesday, June 5, the Managing Director and Chief Executive Officer, Nneka Onyeali-Ikpe, disclosed that “the proceeds of the combined offer will be applied towards investment in IT infrastructure, business and regional expansion, and investment in product distribution channels.”
With an international operating licence from the CBN, Fidelity Bank is mandated to raise its capital base to N500 billion within the next two years and for a bank that is sure of its business fundamentals, it is not a surprise that it has effectively positioned itself at the forefront of achieving the revised minimum capital requirements for Nigerian commercial banks. No other bank is yet to embark on the process.
Could that be the reason for the campaign of calumny? If it is, then those on this demarketing campaign are tactless and dim. They would have known that the campaign died even before it took off.
But the dim-wittedness of the agents of doom beggars belief. If not, how could one envisage that one of the high-flying financial institutions in Nigeria could be at the verge of being liquidated? What explanation will even the CBN give for taking such a step because the truth remains that if Fidelity Bank is declared insolvent today, then no other bank is safe.
Why?
Since Fidelity Bank was incorporated in 1987 and began operations in 1988, it has not looked back. Though it started with a Merchant Banking license, it converted to a commercial bank in 1999 in a deliberate push to grow as a private limited liability company. Yet, not satisfied with playing the second fiddle, the bank transmuted into a Public Limited Company in August of the same year. Since then, it has grown from being a marginal player to one of the industry giants, securing its universal banking license in February 2001.
In 2005 during the Chukwuma Soludo-engineered consolidation exercise, Fidelity Bank acquired the then FSB International Bank Plc. and Manny Bank Plc. to become one of the top 10 Nigerian banks. Six years after the consolidation, the bank was ranked not only the seventh most capitalised bank in Nigeria but also the 25th on the African continent. In 2011, it obtained its international banking license and following its renewed retail and digital banking drive, was ranked the fourth best bank in Nigeria in the retail market segment in the 2017 KPMG Banking Industry Customer Satisfaction Survey (BICSS).
Today, Fidelity Bank has presence in all the states and major cities in Nigeria and continues to rank among one of the ten main banks in the country by tier-one capital of nearly $1 billion.
In a report on April 11, 2024 titled, “Fidelity Bank in 2024: A Peek Under the Banking Bonnet,” Proshare, a financial services information provider wrote: “In two decades, Fidelity Bank has sweated its assets to grow gross earnings to N337.05 billion in FY 2022, with an average annual growth rate of 30.3 per cent. The group has diversified its gross earnings, averaging 16 per cent from non-interest income and 84 per cent from interest income. The consistent rise in digital income and foreign exchange gains appears to have supported the continuous rise in the lender’s non-interest income, providing a buffer for rising operating costs.”
Proshare analysts also estimated that Fidelity Bank will rise to full Tier 1 status in its next Tier 1 Banking Sector Report even as it currently leads second-tier banks in gross earnings, profitability, total assets, customer deposits, loans and advances.
In its report on the best performing banks in Q1 2024 based on pre-tax profit, Nairametrics, an online business magazine, said: “Fidelity Bank Plc. posted a pre-tax profit of N39.5 billion, marking a 120 per cent growth from the N17.9 billion pre-tax profit recorded in Q1 2023. During the quarter, the bank posted a net interest income of N99.6 billion, marking a 90 per cent YoY growth from Q1 2023. Fidelity Bank posted gross earnings of N192.1 billion during the quarter, as it also recorded a net income of N31.4 billion, up by 101 per cent YoY from N15.7 billion as of Q1 2023.”
Based on its outstanding financial performance, the bank was voted the most trusted wealth management company for 2023, earning top rankings for “financial soundness, quality of products and services, protecting privacy and security, and sensitivity to customer needs” by Investor’s Business Daily.
The odious attempt to precipitate a run on Fidelity Bank is financial sleight of hand of the worst sort. While the bank is not at any risk considering its very robust fundamentals, the banking industry may be worse for such an invidious campaign if unchecked.
Those who are trying to instigate instability in the country’s financial ecosystem should desist. Competition must not be a sleight of the hand battle.
BUA Foods Records 91% Surge in Profit After Tax, Hits ₦508bn in 2025
By femi Oyewale
Business
Adron Homes Unveils “Love for Love” Valentine Promo with Exciting Discounts, Luxury Gifts, and Travel Rewards
Adron Homes Unveils “Love for Love” Valentine Promo with Exciting Discounts, Luxury Gifts, and Travel Rewards
In celebration of the season of love, Adron Homes and Properties has announced the launch of its special Valentine campaign, “Love for Love” Promo, a customer-centric initiative designed to reward Nigerians who choose to express love through smart, lasting real estate investments.
The Love for Love Promo offers clients attractive discounts, flexible payment options, and an array of exclusive gift items, reinforcing Adron Homes’ commitment to making property ownership both rewarding and accessible. The campaign runs throughout the Valentine season and applies to the company’s wide portfolio of estates and housing projects strategically located across Nigeria.
Speaking on the promo, the company’s Managing Director, Mrs Adenike Ajobo, stated that the initiative is aimed at encouraging individuals and families to move beyond conventional Valentine gifts by investing in assets that secure their future. According to the company, love is best demonstrated through stability, legacy, and long-term value—principles that real estate ownership represents.
Under the promo structure, clients who make a payment of ₦100,000 receive cake, chocolates, and a bottle of wine, while those who pay ₦200,000 are rewarded with a Love Hamper. Payments of ₦500,000 attract a Love Hamper plus cake, and clients who pay ₦1,000,000 enjoy a choice of a Samsung phone or a Love Hamper with cake.
The rewards become increasingly premium as commitment grows. Clients who pay ₦5,000,000 receive either an iPad or an all-expenses-paid romantic getaway for a couple at one of Nigeria’s finest hotels, which includes two nights’ accommodation, special treats, and a Love Hamper. A payment of ₦10,000,000 comes with a choice of a Samsung Z Fold 7, three nights at a top-tier resort in Nigeria, or a full solar power installation.
For high-value investors, the Love for Love Promo delivers exceptional lifestyle experiences. Clients who pay ₦30,000,000 on land are rewarded with a three-night couple’s trip to Doha, Qatar, or South Africa, while purchasers of any Adron Homes house valued at ₦50,000,000 receive a double-door refrigerator.
The promo covers Adron Homes’ estates located in Lagos, Shimawa, Sagamu, Atan–Ota, Papalanto, Abeokuta, Ibadan, Osun, Ekiti, Abuja, Nasarawa, and Niger States, offering clients the opportunity to invest in fast-growing, strategically positioned communities nationwide.
Adron Homes reiterated that beyond the incentives, the campaign underscores the company’s strong reputation for secure land titles, affordable pricing, strategic locations, and a proven legacy in real estate development.
As Valentine’s Day approaches, Adron Homes encourages Nigerians at home and in the diaspora to take advantage of the Love for Love Promo to enjoy exceptional value, exclusive rewards, and the opportunity to build a future rooted in love, security, and prosperity.
*Why Nigeria’s Banks Still on Shaky Ground with Big Profits, Weak Capital*
*BY BLAISE UDUNZE*
Despite the fragile 2024 economy grappling with inflation, currency volatility, and weak growth, Nigeria’s banking industry was widely portrayed as successful and strong amid triumphal headlines. The figures appeared to signal strength, resilience, and superior management as the Tier-1 banks such as Access Bank, Zenith Bank, GTBank, UBA, and First Bank of Nigeria, collectively reported profits approaching, and in some cases exceeding, N1 trillion. Surprisingly, a year later, these same banks touted as sound and solid are locked in a frenetic race to the capital markets, issuing rights offers and public placements back-to-back to meet the Central Bank of Nigeria’s N500 billion recapitalisation thresholds.
The contradiction is glaring. If Nigeria’s biggest banks are so profitable, why are they unable to internally fund their new capital requirements? Why have no fewer than 27 banks tapped the capital market in quick succession despite repeated assurances of balance-sheet robustness? And more fundamentally, what do these record profits actually say about the real health of the banking system?
The recapitalisation directive announced by the CBN in 2024 was ambitious by design. Banks with international licences were required to raise minimum capital to N500 billion by March 2026, while national and regional banks faced lower but still substantial thresholds ranging from N200 billion to N50 billion, respectively. Looking at the policy, it was sold as a modern reform meant to make banks stronger, more resilient in tough times, and better able to support major long-term economic development. In theory, strong banks should welcome such reforms. In practice, the scramble that followed has exposed uncomfortable truths about the structure of bank profitability in Nigeria.
At the heart of the inconsistency is a fundamental misunderstanding often encouraged by the banks themselves between profits and capital. Unknown to many, profitability, no matter how impressive, does not automatically translate into regulatory capital. Primarily, the CBN’s recapitalisation framework actually focuses on money paid in by shareholders when buying shares, fresh equity injected by investors over retained earnings or profits that exist mainly on paper.
This distinction matters because much of the profit surge recorded in 2024 and early 2025 was neither cash-generative nor sustainably repeatable. A significant portion of those headline banks’ profits reported actually came from foreign exchange revaluation gains following the sharp fall of the naira after exchange-rate unification. The industry witnessed that banks’ holding dollar-denominated assets their books showed bigger numbers as their balance sheets swell in naira terms, creating enormous paper profits without a corresponding improvement in underlying operational strength. These gains inflated income statements but did little to strengthen core capital, especially after the CBN barred banks from using FX revaluation gains for dividends or routine operations. In effect, banks looked richer without becoming stronger.
Beyond FX effects, Nigerian banks have increasingly relied on non-interest income fees, charges, and transaction levies to drive profitability. While this model is lucrative, it does not necessarily deepen financial intermediation or expand productive lending. High profits built on customer charges rather than loan growth offer limited support for long-term balance-sheet expansion. They also leave banks vulnerable when macroeconomic conditions shift, as is now happening.
Indeed, the recapitalisation exercise coincides with a turning point in the monetary cycle. The extraordinary conditions that supported bank earnings in 2024 and 2025 are beginning to unwind. Analysts now warn that Nigerian banks are approaching earnings reset, as net interest margins the backbone of traditional banking profitability, come under sustained pressure.
Renaissance Capital, in a January note, projects that major banks including Zenith, GTCO, Access Holdings, and UBA will struggle to deliver earnings growth in 2026 comparable to recent performance.
In a real sense, the CBN is expected to lower interest rates by 400 to 500 basis points because inflation is slowing down, and this means that banks will earn less on loans and government bonds, but they may not be able to quickly lower the interest they pay on deposits or other debts. The cash reserve requirements are still elevated, which does not earn interest; banks can’t easily increase or expand lending investments to make up for lower returns. The implications are significant. Net interest margin, the difference between what banks earn on loans and investments and what they pay on deposits, is poised to contract. Deposit competition is intensifying as lenders fight to shore up liquidity ahead of recapitalisation deadlines, pushing up funding costs. At the same time, yields on treasury bills and bonds, long a safe and lucrative haven for banks are expected to soften in a lower-rate environment. The result is a narrowing profit cushion just as banks are being asked to carry far larger equity bases.
Compounding this challenge is the fading of FX revaluation windfalls. With the naira relatively more stable in early 2026, the non-cash gains that once flattered bank earnings have largely evaporated. What remains is the less glamorous reality of core banking operations: credit risk management, cost efficiency, and genuine loan growth in a sluggish economy. In this new environment, maintaining headline profits will be far harder, even before accounting for the dilutive impact of recapitalisation.
That dilution is another underappreciated consequence of the capital rush. Massive share issuances mean that even if banks manage to sustain absolute profit levels, earnings per share and return on equity are likely to decline. Zenith, Access, UBA, and others are dramatically increasing their share counts. The same earnings pie is now being divided among many more shareholders, making individual returns leaner than during the pre-recapitalisation boom. For investors, the optics of strong profits may soon give way to the reality of weaker per-share performance.
Yet banks have pressed ahead, not only out of regulatory necessity but also strategic calculation.
During this period of recapitalization, investors are interested in the stock market with optimism, especially about bank shares, as banks are raising fresh capital, and this makes it easier to attract investments. This has become a season for the management teams to seize the moment to raise funds at relatively attractive valuations, strengthen ownership positions, and position themselves for post-recapitalisation dominance. In several cases, major shareholders and insiders have increased their stakes, as projected in the media, signalling confidence in long-term prospects even as near-term returns face pressure.
There is also a broader structural ambition at play. Well-capitalised banks can take on larger single obligor exposures, finance infrastructure projects, expand regionally, and compete more credibly with pan-African and global peers. From this perspective, recapitalisation is not merely about compliance but about reshaping the competitive hierarchy of Nigerian banking. What will be witnessed in the industry is that those who succeed will emerge larger, fewer, and more powerful. Those that fail will be forced into consolidation, retreat, or irrelevance.
For the wider economy, the outcome is ambiguous. Stronger banks with deeper capital buffers could improve systemic stability and enhance Nigeria’s ability to fund long-term development. The point is that while merging or consolidating banks may make them safer, it can also harm the market and the economy because it will reduce competition, let a few banks dominate, and encourage them to earn easy money from bonds and fees instead of funding real businesses. The truth be told, injecting more capital into the banks without complementary reforms in credit infrastructure, risk-sharing mechanisms, and fiscal discipline, isn’t enough as the aforementioned reforms are also needed.
The rush as exposed in this period, is that the moment Nigerian banks started raising new capital, the glaring reality behind their reported profits became clearer, that profits weren’t purely from good management, while the financial industry is not as sound and strong as its headline figures. The fact that trillion-naira profit banks must return repeatedly to shareholders for fresh capital is not a sign of excess strength, but of structural imbalance.
With the deadline for banks to raise new capital coming soon, by 31 March 2026, the focus has shifted from just raising N500 billion. N200 billion or N50 billion to think about the future shape and quality of Nigeria’s financial industry, or what it will actually look like afterward. Will recapitalisation mark a turning point toward deeper intermediation, lower dependence on speculative gains, and stronger support for economic growth? Or will it simply reset the numbers while leaving underlying incentives unchanged?
The answer will define the next chapter of Nigerian banking long after the capital market roadshows have ended and the profit headlines have faded.
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: [email protected]
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