Fidelity Bank Shares Dip 0.58% Despite Fitch Upgrade

Amid the upgrade of Fidelity Bank’s issuer default rating from ‘B-’ to ‘B’ by Fitch, the shares of the bank have dipped during Thursday’s trading session on the floor of the Nigerian Exchange Limited (NGX).

The shares of the financial institution fell marginally by 0.58 per cent to close at N3.42 kobo per share down from N3.44 kobo per share.

Also, its market capitalisation declined by N579.5 million, representing a 0.58 per cent dip to settle at N99.09 billion compared to its previous closing at N99.67 billion.

During Thursday’s trading session, Fidelity Bank transacted a total of 5.05 million units of shares valued at N16.83 million, while its outstanding shares are kept at 28,974,797,023.

The marginal fall of the Bank’s shares comes barely 24- hours after Fitch upgraded Fidelity Bank Plc’s long-term issuer default rating (IDR) from ‘B-’ to ‘B’.

In a statement, Fitch also upgraded Fidelity’s national long-term rating to ‘A(nga)’ from ‘BBB+(nga)’.

The global rating agency noted that the upgrade is due to the bank’s improving business profile and resilient financial metrics.

According to Fitch, the improved rating is a reflection of the bank’s increased creditworthiness relative to other issuers in Nigeria, emphasising that, “Fidelity’s long and short-term IDRs are driven by its standalone creditworthiness, as expressed by its viability rating (VR) of ‘b’’’.

“These are balanced against high sensitivity to Nigeria’s challenging operating environment as well as higher credit concentration as a percentage of equity and weaker profitability than larger domestic-rated peers,” Fitch stated.

Commenting on the rating, Nneka Onyeali-Ikpe, managing director and chief executive officer (CEO), Fidelity Bank Plc, said,

“Receiving this upgrade at a time when the global economy is faced with a myriad of challenges, speaks to the strength of our business model, the efficacy of our risk management culture and the commitment of our staff towards creating sustainable value for all stakeholders.

“As a bank, we will continue to execute our growth strategy in a prudent manner that allows us to take advantage of emerging opportunities in our various markets”.