Shareholders of Fidelity Bank Plc have praised the board of directors for ensuring dividend pay-outs despite unfavourable economic environment.
At the Annual General Meeting (AGM) on Thursday, investors unanimously approved a total of N4.05 billion, translating to 14 kobo per share for the period ended December 31, 2016, while imploring the bank to do more in the coming year.
Speaking on behalf of other shareholders, Mr Boniface Okezie, President of the Progressive Shareholders Association of Nigeria (PSAN), noted that though the dividend payout was lesser than that of the previous year, the bank should be commended for its regular dividend payout.
“Less is better than nothing, but we want to commend this bank for consistently paying dividend no matter how small or how big. N4 billion plus pay-out today is a huge sum of money,” he said.
Shola Abodurin from Ibadan also gave kudos to the bank, noting that despite the country being in recession, the first in 20 years and the increased inflation rate, it was commendable that the company gave its shareholders dividend.
“Despite the challenges, you still pay us 14 kobo out of 34 kobo earning per share. I think that is good and I praise you for it,” he said.
Responding to accolades, Chairman of Fidelity Bank Plc, Ernest Ebi, assured that the shareholders remained “one of the pillars of our strategic priorities,” thus promising that the board of directors would not relent its efforts to ensure better dividend pay-out.
On the company’s 2016 full year result he said Gross Earnings of the company grew by 3.5 per cent to N152 billion from N146.9 billion, noting that the growth in total earnings came from interest income on loans which grew by 9.3 per cent to N92.7 per cent billion from N84.8 billion in 2015 as well as the 9.6 per cent growth in net fees and commission income.
“Total interest expense increased by 1.5 per cent from N61.2 billion which was due to the devaluation impact on interest expense on borrowings. Operating expenses also increased by 4.7 per cent to N67.2 billion in 2016 from N64.2 billion the previous year due to a N4.8 billion increase in staff gratuity and retirement benefit plan.”
He added that despite the decline in profitability as profit before tax dropped by 21.1 per cent to N11.1 billion from N15.8 billion, the company remained strong, boasting of a capital adequacy ration of 17.2 per cent in 2016 which stood well above the regulatory minimum of 15 per cent.
“This implies that as the business environment opens up in 2017 financial year, your bank will have adequate capital to latch on the opportunities,” he said.
While making a projection of 2017 financial year, Managing Director and Chief Executive Officer of the bank, Nnamdi Okonkwo, said the bank is poised to take advantage of the Federal Government’s Economic Recovery and Growth Plan (ERGP), which revealed Government’s plans to focus on specific sectors it projected would be key to economic revival.
“As we do that, we will not relent on plans to redesign our systems and processes to boost service delivery, intensify strategic efforts to reduce operating expenses and cost-to-serve, as well as improve our overall risk monitoring capacities to ensure both internal and external risks are promptly recognised and swiftly purged,” he said.