Fidelity Bank anticipates a loss exceeding N1 billion due to legal proceedings.

 Fidelity Bank anticipates a loss exceeding N1 billion due to legal proceedings.

Fidelity Bank's management anticipates a potential financial setback of approximately N1.19 billion arising from claims and legal disputes for the fiscal year ending December 2023. This revelation is detailed in the bank's condensed unaudited financial statements for 2023, which have been officially submitted to the Nigerian Exchange Limited. The banking institution is currently entangled in a total of 65 legal cases as a defendant, with an additional seven cases where it assumes the role of a plaintiff. The cumulative amount asserted against the bank in these legal matters is estimated at N11.74 billion. The financial report underscores that, based on existing information and legal advice, the directors remain optimistic that the outcomes of these legal proceedings won't have a significant adverse impact on the bank's financial standing, either individually or collectively. However, there is a projected potential loss of N1.19 billion upon the resolution of these cases, compared to N883 million in December 2022.

The financial disclosure further highlights that as of December 31, 2023, the bank had posted a post-tax profit of N142.83 billion, marking an impressive 205% growth compared to the N46.72 billion recorded in the preceding year. Additionally, the bank's earnings witnessed a robust increase, soaring from N337.05 billion in the previous year to N553.90 billion, signifying a notable 64.34% growth.

Unveiling more insights from the unaudited report, it is revealed that the bank extended loans and advances amounting to approximately N1.11 trillion to customers in the oil and gas sector. The manufacturing sector followed, receiving N357.55 billion, while the transportation sector secured N328.06 billion in loans. Despite the potential legal challenges, Fidelity Bank experienced positive momentum in the stock market, closing trading on Thursday with a market capitalization of N374.54 billion. The bank's stocks appreciated by 9.86%, concluding at N11.7 each.

It's noteworthy that in compliance with regulatory requirements, multiple financial institutions are expected to assess and disclose potential losses associated with litigation and claims as they release their audited results for the full year in the coming weeks.