Prime Business AfricaFidelity Bank is battling a decline in investor confidence amid a court battle over N225 billion in damages awarded to a Nigerian firm, Sagecom Concepts Limited, against the lender and G. Cappa Plc.
On Monday, May 19, reports regarding the court order emerged, alleging that Fidelity Bank might go bankrupt as its balance sheet is not strong enough to cover the N225 billion damages, having reported N385 billion in profit before tax (PBT) in 2024.
Join our WhatsApp ChannelAlthough Fidelity Bank has dismissed the bankruptcy claim, and clarified that the damage fee is either N14 billion or N30.7 billion, depending on the exchange rate used, adding that the bulk of the sum falls on G. Cappa, while the bank accounts for a small portion.
To further assure investors that Fidelity Bank is a going concern or financially stable, Nneka Onyeali-Ikpe, the lender’s Managing Director (MD) and Chief Executive Officer (CEO), acquired 18 million shares in the bank, worth N366 million.
Onyeali-Ikpe increased her exposure in the bank from 94,64 million shares (0.18 per cent stake) held as at December 31, 2024, to 112.64 million shares (0.22 per cent stake).
However, the clarification and Onyeali-Ikpe’s share acquisition have had little or no impact on investors’ confidence, as sell-off rocked Fidelity Bank in the capital market.
Prior to the bankruptcy report, on May 16, 20.46 million shares of Fidelity Bank were traded at a rate of N20.8 kobo per share, however, on May 19, the company’s share price fell to N20, with over 39.41 million shares traded.
The next day, the volume of shares traded increased to 60.18 million, while the share price dropped to N19, and on May 21, over 67.68 million shares were traded, with the share trading at N18.65 kobo.
During this period, the lender’s share price hit a downward trajectory, declining by N2.15 kobo from N20.8 kobo to N18.65 kobo, resulting in Fidelity Bank shareholders recording a 10.33 per cent decline in their investments, according to analysis by Prime Business Africa.
Consequently, Fidelity Bank shareholders have recorded a combined loss of N107.95 billion within a space of three days.
The decline in investors’ confidence towards Fidelity Bank has also resulted in the company losing its trillionaire status in the stock market, after its market capitalisation or valuation dropped from N1.04 trillion to N936.45 billion.
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Prime Business Africa is a business, economy and policy news platform founded in 2021 by veteran journalist and media scholar, Dr Marcel Mbamalu, after he left The Guardian as Editor.
Dr Mbamalu, who serves as Founder and Publisher, set up Prime Business Africa to deliver sharp, data-driven reporting on Nigeria’s markets, trade, investment, and governance trends for decision-makers, entrepreneurs, and policy leaders.
He also writes The Bottom Line, a backpage column for Punch Newspaper every Thursday.
Under his leadership, Prime Business Africa combines deep newsroom experience with a focus on accountability journalism, aiming to bridge information gaps between Africa’s private sector and the global economy.
