Fidelity looks to electronic banking to boost profits

NIGERIA’S Fidelity Bank is targeting retail clients using lowcost electronic channels to boost profits after a recession in Africa’s biggest economy forced the mid-tier lender to slow loan growth, a senior executive said yesterday.

Several Nigerian lenders have adapted their business models after low crude prices put pressure on the once lucrative oil and gas loan book. Nigeria faces its worst recession in 25 years, brought on by the fall in oil prices.

Fidelity chief operations and information officer Gbolahan Joshua said electronic banking has become a growth area as lenders enable customers to make payments such as phone top-ups and airline tickets for a fee via the internet without taking credit risk after the crisis at home forced them to curb loans.

Joshua said Fidelity’s instant transfer platform, which had almost no customers three years ago, had about one million customers at the end of 2016. Total bank account holders hit 3.5 million last year, he said.

“Electronic banking is where we see income growth,” he said in an interview. “We are capturing customers with mobile phones.”

Normalised profit for Fidelity in the past two years was about 15 billion naira (R630m), Joshua said, adding that earnings could rise further as the economy recovered. – Reuters