Latest / Green Ticker Tales / Fidelity Bank FY 2025 earnings

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Fidelity Bank FY 2025 earnings · Green Ticker Tales

• 0:00
  All right, so let's look at Fidelity Bank audited FY 2025 numbers. Now, I've been seeing a lot of focus on the shareholders funds, the bank crossing the trillionaire and shareholders funds. That's good. But what a lot of investors want to know, are we getting a dividend? And the answer is no, there will be no dividend non-declared by the bank.
• 0:27
  There is no dividend. And I guess we should have a bit more clarity on that next week's earnings call. Sometime next week, the bank will have an earnings call. And I suspect that Q1 numbers probably will be out before the earnings call. So I believe this probably has to do with some derivative losses because you're looking at top line. There was growth in the top line.
• 0:56
  uh 1.5 trillion naira in gross earnings of 45.6 percent year on year where you had the decline do or what probably led to a slight dip in profit um you had your opex operating expenses up by 33.7 percent and then you had your uh a slim growth in operating income
• 1:24
  so you had 811.6 billion naira in operating income up about five percent year on year or your opex came in at 443 billion up 33.7 so if your opex grows faster than your operating income what that leads is to a jumping cost to income ratio uh so i'm guessing these derivative losses that led to the slight steep in profit a profit after tax for the year came in at 242.4 billion
• 1:53
  down 12.8 percent uh year on year and obviously if you have a dip in profit and an increase in your assets and equity your return on assets and return on equity i would dip uh return on equity came in at 22.2 percent uh down 28 percent year on year at 22 return equity isn't bad but if you look at where your
• 2:18
  cost of equity is, it's slightly lower than that. I think for the Nigerian context, you want to see return on equity of maybe 25, 30% is a good comfort zone. So I hope that the bank returns to that in the current financial year. Return on assets came at 2.32%, which is poor, but it's understandable. You had this increase in assets, your profit drops, your return on assets would drop.
• 2:48
  of the numbers now i'm looking at these numbers historically and you probably want to cross over to the video side of things 6 a.m west african time the video will be up on youtube at green tickle warrior you can get more context there uh in the last uh one two three four five years between fy 21 to fy 25 that's the period i'm looking at i mean you've had assets grow at 33.6 percent um equity grew about 39.7 percent
• 3:18
  profit after tax growing at 7.84 percent kiga kiga meaning compound average uh a good rate so clearly i mean the bank has been on the run um the only weakness you've seen is fy 2025 but i guess you'd have a rebound in those uh numbers in 2026 and we should have some more context in the earnings call a schedule for next week now in terms of my forecast where the stock is trading at
• 3:48
  and uh where it is fy 2026 i have a book value per share of somewhere around 19.6 uh naira and if i check what is the current price uh for this stock let's see fidelity bank closed last friday at 22.9 so i don't see much of an upside um from where this stock is uh i think at best if one is going to get into this stock because the book value of 2025
• 4:18
  uh came in at 21.6 and at the moment as a friday the stock was at 22.9 so it's just slightly under book value you can approximate it and just say the stock is trading at book value so where where is the discount even though i must confess that the appreciation you've seen in broad stock market inclusive of the banking stocks mean that uh the rate you're going you're going to have to start getting used to the
• 4:47
  the concept of buying stocks above full value especially buying banking stocks above book value uh so the stock is just at book value i think where this stock would be interesting uh in getting and taking a position i would be the 18 19 mark if you can get 17 that's a great buffer uh but for me the the more important thing it's not just about 2026
• 5:16
  it's about say 2028 2029 uh i think by 2029 you'd have a book value about 29 per share so if you use and i've used a conservative estimate target price of 1.2 times a book value uh if that's the case it means that by fyi 2029 and this stock should be treated as 34 now so and i think you could probably argue look um if you were to use a 1.3
• 5:45
  times book value, right? You probably would be looking at much higher figures. And in any case, I think if we can get back to a return on equity of 30% and hold that constant, it means every four years, you know, you're doing a 120% return on equity, if my math is correct. At that point, then a 1.3 times book value would justify it. If I could argue that, look, there's nothing wrong in this stock trading at 1.3 times book value.
• 6:15
  As it currently is. And if you're wondering what book value is, it's quite simple. Assets minus liability. That gives you equity. You divide that by the number of shares. That gives you the book value per share for the firm. So, pretty uninspiring numbers. It's not the worst of the banks that fail to pay a dividend. But I'm looking forward to a bit more clarity. The IFU bright side and the UK branch is profitable.
• 6:45
  which is good to see. Get more clarity from the call. So let's go see what technical analysis tells us about this stock. What do I use? Do I use investing.com or do I use TradingView? Let's use TradingView. TradingView fits my screen at the moment. Let's see what the technical says. The broad market has done quite well. But one of the reasons why I like to use TradingView is it gives me...
• 7:13
  year to date um figures which which then helps me gives me some broader context as to what the stock has done um so what do i see here today the stock is yesterday the stock is up to 20.5 percent i mean that's underperformed the ocean index index is up about a bit over 60 percent around 60 percent so stock has underperformed the index the broad um
• 7:44
  market index the last one year dude it's done 16 so the stock has kind of lagged the last one year is on 16.8 percent last three months is done 16.24 percent so uh the big dip was probably sometime in may this is may 4th if i look at it let's look at year to date the lowest this stock has traded at is probably um can i get a tracer here
• 8:15
  Or can I switch? So what are we seeing? Let's see if I can get a 52-week high and 52-week low for this stock. The lows I'm seeing here are just above the around 18 Naira mark. So clearly, I mean, if you can wait to 18, that's not bad. The question is, what would push this stock to 18 Naira a share? It adds 22.
• 8:46
  So you probably will need a 10% decline. I think it's doable. You just have to wait and be patient. 18 really, anything sub 29 will be a good place to get into your stock, especially 18. 18, 19 will be a sweet spot because then you'll be getting the stock just below book value, which gives you a good margin of safety. I don't see any reason why this stock should trade below book value in my mind. I do worry though.
• 9:16
  and anybody who's looked at and probably i'll show you guys in the video the bank has a fairly large uh stage two loans now you have stage one loans loans are pretty okay stage two not not so okay then stage three those are those are essentially gone bad uh they have a huge portion of stage two loans really huge question and the question i always ask myself is
• 9:43
  if we knock off 100 billion, 200 billion from those roles, where are we going to be at? So that's something I think they need to address. And yes, they'll say, well, it's performing, watching, but I want to see movement either back to stage one or back to stage three, and then we can know going forward. But let's look at what the technicals have to say about this stock. Moving averages, where are we?
• 10:14
  we actually are not in a bad place the stock is at 22.9 a resistance point is 23.62 so we just actually are falling below resistance the pivot point is 20.63 so the question is can we get to 29 share i think we can easily do that so maybe you don't want to be too techie about it you can start to say hey at 29 share uh and then start to accumulate you know so these are my thoughts
• 10:44
  on fidelity bank i hope you join me at 6 a.m nigerian time at green ticker warrior on youtube uh where you'd see the video version of things and that should give you a bit more context i can then also play around with the the financials as well so you can see how those changes matter uh thank you for listening and hopefully you join me there