Investors root for Fidelity Bank despite EFCC allegations

Investors root for Fidelity Bank despite EFCC allegations

Investors have shown in today’s (28 April, 2016) trading on the Nigerian Stock Exchange (NSE) that they are unshaken by the allegations made by the Economic and Financial Crimes Commission (EFCC) against Fidelity Bank Plc.

The bank shares was among the few bank shares that recorded gains in trading  despite media reports that the bank’s Managing Director, Nnamdi Okonkwo has been arrested over allegations that $115 million was passed through the bank to bribe electoral officials during the 2015 elections.

The bank’s share price appreciated by 2.5% in Thursday’s trading on the NSE to close at N1.20 per share, making it one of the best performing stocks in the banking sector, showing that investors’ confidence remain unshaken by the allegations.

Analysts say the appreciation in share price is a sign that investors believe that the allegations will have no material impact on the bank’s operations.

“This clearly shows that investors are not really worried about the allegations. Besides, I think the figures being mentioned are exaggerated just for effect. The monies were collected in the normal course of business and disbursed in the normal course of business in my perspective. I believe this issue is likely to be resolved” said an analyst.

Fidelity Bank on Thursday, also issued a press release stating that that the bank was fully cooperating with the EFCC over the allegations.

The bank’s statement read: “Our attention has been drawn to reports in the media on investigations into transactions undertaken by the Bank in the normal course of business in 2015.

“The transactions are now the subject matter of investigations by the Economic & Financial Crimes Commission (EFCC).

“We can confirm that the transactions were duly reported as required by the regulators and the Bank is cooperating fully with the authorities on the investigation.

“We assure our numerous stakeholders, including our customers that we are working assiduously towards a quick resolution of the issues.”

Fidelity Bank Plc, one of the country’s most capitalised financial institutions, recently released its full year results showing gross earnings for the period ended December 31, 2015 grew to N146.9 billion from N136.1 billion recorded in 2014 Financial Year (FY). The bank also announced   N4.6 billion as dividend payout, thus maintaining a tradition of consistent dividend pay-out for the past six years.

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