Pin It
Saturday 23rd October 2021,
Hope for Nigeria

Fidelity Bank’s foreign currency exposure hits 27per cent

Fidelity Bank’s


Fidelity Bank’s exposure to foreign currency lending rose to 27 per cent last year, from one per cent in 2012, a report by Renaissance Capital (RenCap), an investment and research firm, has shown.

The firm said Fidelity achieved the growth after deploying its foreign currency liabilities as the pressure on funding costs persisted.

The bank’s 2013 result showed that it reported the lowest Net Interest Margin (NIM) in Nigerian banking universe, reaching a 10-year low of four per cent. It said Fidelity’s NIM squeeze started in 2011, when the lender increasingly focused on corporate lending and was subsequently faced with a tightening monetary policy environment.

RenCap said Fidelity’s management acknowledges the current challenges and its initial focus will be on reducing the funding costs by continuous downward re-pricing of costly term deposits, which is under way and increasing the proportion of staff in market-facing roles while also rewarding them appropriately. It also plans to increase branch footprint (e-branches mainly) to increase market reach.

“Overall, there will be significantly more focus on driving e-banking products for customer mobilisation and service and an merger and acquisition deal could happen for the right target and price,” it said.

On the asset side, Fidelity is positioning itself to be a Small and Medium Enterprise-focused bank, and, coupled with its payroll lending retail book, management expects combined exposure to rise to 50 per cent over the medium term (2017), from 28 per cent in 2013.

RenCap said management has also been re-pricing the existing loan book and plans to periodically review all concessions and lending rates.

The research form advises the lender to improve the quality of reporting and investor communication. “We have made slight changes to our forecasts, largely along the lines of modestly higher NIMs and loan growth, the impact of which was offset by higher cost of risk over the forecast period. We expect the stronger growth in SME lending to keep Fidelity’s cost of risk elevated, at two per cent, against our previous forecast of one per cent over the next few years,” it said.

If you enjoyed this article FEEL Free to TIP Hope for Nigeria Online:

Any Amount Welcome 🙂


Do you have story and would like it to be published on Hope for Nigeria? or want to Place Adverts on the Website, If yes email us at

Like this Article? Share it!

Leave A Response