Fidelity Bank’s management estimated that, for the year ending in December 2023, it would lose over N1.19 billion due to claims and litigation.
The PUNCH reported that its unaudited financial accounts for 2023, which were submitted to the Nigerian Exchange Limited, demonstrated this.
According to the lender, it was involved in legal proceedings resulting from its regular business operations throughout the reviewed year, acting as both a plaintiff and a defender.
Although the directors felt that none of the cases’ outcomes would materially negatively impact the bank’s financial position, either individually or collectively, based on available information and legal counsel’s advice, it is projected that there may be a potential loss of N1.19bn (Dec 2022: N883m) upon conclusion of the cases.
“The Bank is presently participating in 65 cases as a defendant (December 31, 2022–58) and seven cases as a plaintiff (December 31, 022–15) as of the reporting date.
The financial report stated, in part, that “The total amount claimed against the bank is estimated at N11.74 billion as of December 31, 2023 (31 December 2022: N12.06 billion), whereas the amount in the seven cases the bank instituted is N3.95 billion as of December 31, 2023 (31 December 2022: N5.19 billion, 15 Cases).
In the meantime, the bank reported a post-tax profit of N142.83 billion, up 205% from the N46.72 billion reported in 2022. Additionally, the bank’s earnings increased by 64.34 percent to N553.90 billion from N337.05 billion the year before.
Also, the unaudited report revealed how the bank gave about N1.11tn in loans and advances to customers in the oil and gas sector, followed by the manufacturing sector which got NN357.55bn, and then the transportation sector at N328.06bn.
With its equities up 9.86 per cent to close at N11.7 a share, Fidelity Bank’s valuation was valued at N 374.54 billion at the close of business on Thursday.
As they announce their full year audited results in the upcoming weeks, a number of lenders are likely to estimate their potential loss from litigation and claims in accordance with regulatory requirements.