By Segun Oniyide
The Managing Director/Chief Executive Officer, Fidelity Bank Plc, Mr. Nnamdi Okonkwo has said that the bank plans to increase its lending to small and medium scale enterprises (SMEs) as well as to the retail segment to 50 per cent by 2017, from the 28 per cent it attained in 2013.
He also said the bank has been positioned to be an SME-focused bank.
Renaissance Capital (RenCap), in a report titled New CEO It’s all about execution, quoted Okonkwo to have made the remark during his first investor conference call. Beyond reviewing the 2013 performance, Okonkwo also presented his strategic plan for the bank going forward.
According to the report, management of Fidelity Bank acknowledged the challenges in the industry and assured stakeholders that its initial focus would be on reducing funding costs by continuous downward re-pricing of costly term deposits; increase the proportion of its members of staff in market-facing roles while rewarding them appropriately; and increase branch footprint to increase market reach.
Overall, the bank also indicated plans to also significantly increase its focus on driving e-banking products for customer mobilisation and service.
The bank may also undertake a merger and acquisition deal for the right target and price.
RenCap explained that Okonkwo was emphatic about his plans to run an open and communicative management style, partly driven by frequent investor calls going forward.
We think this is particularly important for Fidelity to reawaken investor interest in the story and showcase the impact of multiple changes currently being implemented. In addition to this, 2013 saw the bank’s exposure to foreign currency lending rise to 27 per cent from one in 2012, as the bank deployed its foreign currency liabilities while the pressure on funding costs persisted.
Management has also been re-pricing the existing loan book and plans to periodically review all concessions and lending rates.
On the back of yesterday’s call and our extensive discussions with the new CEO and Head of Strategy, Innovation and Business Transformation, Gbolahan Joshua, it appears to us that things are set to change at Fidelity,” it added.
However, RenCap advised the bank to ensure that it delivers consistently on targets by matching action with numbers; create shareholder value by getting the RoE up to the high double digits in the medium term; and improve the quality of reporting and investor communication.