2020 Financial Highlights

Financial Highlights ☐ Net interest margin (NIM) improved to 6.3% from 6.2% in 2019FY on account of a 270bpts drop in average funding cost to 3.6% from 6.3% in 2019FY. This translated to a 28.6% drop in total interest expenses despite a 31.3% increase in interest bearing liabilities. NIM stood above our 2020FY guidance of 5.5% - 6.0%. ☐ Net fee income declined by 14.9% YoY but increased by 14.0% QoQ driven by double-digit growth in digital banking income, FX related income, account maintenance charges and trade income etc. The downward review of transaction charges in line with the new bankers' tariff impacted negatively on fees and commission income, however, increased transaction volume post lockdown across states spurred fee income in Q4 2020. ☐ Total operating expenses inched up by 2.0% to N83.6bn largely due to N2.2bn growth in regulatory charges. However, growth in operating expenses remains below headline inflation with cost-to-income ratio dropping to 65.1% from 73.4% in 2019FY and below of our 2020 Guidance of 70.0%. □ Operating profit (i.e. PBT before impairment) increased 50.9% to N44.9bn from N29.8bn in 2019FY. However, PBT declined by 7.6% to N28.1bn from N30.4bn as we proactively increased our provisions on risk assets to N16.9bn from a net write-back of NO.6bn in 2019FY. 12 www.fidelitybank.ng

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