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Fidelity Bank estimates over N1bn loss to litigation

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The management of Fidelity Bank has estimated that it may lose about N1.19bn to claims and litigation for the year ended December 2023.

This was shown in its condensed unaudited financial statements for 2023 filed with the Nigerian Exchange Limited.

The lender said for the year under review, it was a party to legal actions arising out of its normal business operations, both as a plantiff and as a defender.

While the directors believed that based on current information and the advice of counsel, none of the outcomes that result from the proceedings would have a material adverse effect on the financial position of the bank either individually or collectively, it is estimated that there may be a potential loss of N1.19bn (Dec 2022: N883m) upon conclusion of the cases.

“As of reporting date, the Bank is currently involved in 65 cases as defendant (31 December 2022 – 58 ) and seven cases as Plaintiff (31 December 2022 – 15).

“The total amount claimed against the Bank is estimated at N11.74 billion as at December 31, 2023 (31 Dec 2022: N12.06 billion) while the amount in the 7 cases instituted by the Bank is N3.95 billion as at 31 December 2023 (31 Dec 2022: N5.19 billion, 15 Cases),” part of the financial report read.

Meanwhile, the bank posted a post-tax profit N142.83bn representing a 205 per cent growth from the N46.72bn recorded in 2022. The bank’s earnings also grew to N553.90bn from N337.05bn in the previous year, marking a 64.34 per cent growth.

The unaudited report also showed that 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.

Fidelity Bank closed trading on Thursday with a market cap worth N 374.54bn. as its stocks appreciated by 9.86 per cent to close at N11.7 each.

In line with regulatory requirement, several lenders are expected to also estimate their possible loss to litigation and claims as they release their full year audited result in coming weeks.

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