Docstoc

to download our July to December - Fidelity AR 2009

Document Sample
to download our July to December - Fidelity AR 2009 Powered By Docstoc
					                      Contents
                      Corporate Information                                                 2
                      Notice of Annual General Meeting                                      4
                      Chairman’s Statement                                                  6
                      Chief Executive Officer’s Review                                      10
                      Risk Management Disclosures                                           13
                      Board of Directors                                                    18
                      Directors’ Profile                                                    20
                      Management Team                                                       23
                      Report of the Directors                                               24
                      Corporate Governance Report                                           28
                      Audit Committee’s Report                                              35
                      Report of the External Consultants on the Board Appraisal             36
                      Report of the Independent Joint Auditors                              37
                      Statement of Accounting Policies                                      38
                      Balance Sheet                                                         44
                      Profit and Loss Account                                               45
                      Statement of Cash Flows                                               46
                      Notes to the Financial Statements                                     47
                      Financial Risk Analysis                                               77
                      Group Statement of Value Added                                        87
                      Bank Statement of Value Added                                         88
                      Group Five - Year Financial Summary                                   89
                      Bank Five - Year Financial Summary                                    90




Friendships are what our
dreams are made of. Some
friends may come and go,
but we will always be there
for you.

We’re Fidelity - we
keep our Word

                                                 Annual Report and Accounts December 2009   3
              Corporate Information


                                               Vision
                                                   No. 1 in every
                                               To be
                                               market we serve and every
                                               branded product we offer


                                               Mission
                                               To make financial services
                                               easy and accessible
                                               to our customers

                                               Our Shared Values - CREST
                                               C- Customer First
                                               R- Respect
                                               E- Excellence
                                               S- Shared Ambition
                                               T- Tenacity


              Head Office:                                       Correspondent Banks:
              Fidelity Place,                                    - ANZ London
              1, Fidelity Bank Close                             - Commerz Bank, Frankfurt
              Off Kofo Abayomi Street,                           - Citibank N.A. London & New York
              Victoria Island, Lagos, Nigeria.                   - ABSA Bank, Johannesburg, South Africa
              Tel: 234 1 2610408 12; 2700530;                    - FBN Bank UK
              Fax: 234 1 2610414.                                - UBA Bank New York
              E-mail: info@fidelitybankplc.com                   - African Export Import Bank, Cairo, Egypt.
              Website: www.fidelitybankplc.com                   - HSBC, South Africa

              Joint Auditors:
              Akintola Williams Deloitte
              235, Ikorodu Road, Ilupeju, Lagos.

              PKF-Pannell Kerr Forster
              Toloye House
              362, Ikorodu Road,1A Okupe Estate,
              Maryland, Lagos




4   Annual Report and Accounts December 2009
              Notice of Meeting
              Notice is hereby given that the                                PROXY
                                                                             A member entitled to attend and vote at the Annual General
              Twenty Second Annual General                                   Meeting is entitled to appoint a proxy to attend in his stead.
              Meeting of Fidelity Bank Plc. will                             A proxy form is attached. The proxy need not be a member
                                                                             of the Company. To be valid, a duly completed and stamped
              be held at the Congress Hall,                                  proxy form must be deposited at the office of the Registrar,
              Transcorp Hilton Hotel, Abuja,                                 First Registrars Nigeria Limited, Plot 2, Abebe Village Road,
                                                                             Iganmu, Lagos not later than 48 hours before the time fixed
              on Thursday the 29th day of                                    for the meeting.
              July, 2010 at 11.00 a. m. for the
                                                                             NOTES
              purpose of transacting the
              following business:                                            (A) DIVIDEND
                                                                                  If the proposed dividend of 2.5 kobo per share is
                                                                                  approved, dividend warrants will be posted on August
              ORDINARY BUSINESS
                                                                                  13, 2010 to shareholders whose names appear in the
              1.     To receive the Statement of Accounts for the period
                                                                                  Register of Members at the close of business on July
                     ended December 31, 2009 together with the Directors'
                                                                                  15, 2010.
                     and Auditors' Reports thereon.
              2.     To declare a dividend.
                                                                             (B) CLOSURE OF REGISTER OF MEMBERS
              3.     To elect/re-elect Directors.
                                                                                  The Register of Members and Transfer Books of the
              4.     To approve the remuneration of Directors.
                                                                                  Company will be closed from July 5, 2010 to July 9,
              5.     To authorize the Directors to fix the remuneration of
                                                                                  2010 both days inclusive.
                     the Auditors.
              6.     To elect members to the Audit Committee.
                                                                             (C) AUDIT COMMITTEE
                                                                                  As stipulated by Section 359 (5) of the Companies and
                                                                                  Allied Matters Act 1990, any member may nominate a
                                                                                  Shareholder for election to the Audit Committee by
                                                                                  giving notice in writing of such nomination to the
                                                                                  Company Secretary at least 21 days before the Annual
                                                                                  General Meeting.

                                                                                  The Central Bank of Nigeria in its Code of Corporate
                                                                                  Governance for Banks stipulates that some members of
                                                                                  the Audit Committee should be knowledgeable in
                                                                                  internal control process, accounting and financial
                                                                                  matters. Consequently, a detailed curriculum vitae
                                                                                  should be submitted with each nomination.

                                                                             By Order of the Board.




                                                                             CHIJIOKE UGOCHUKWU
                                                                             Company Secretary



                                                                             Dated this 14th day of June, 2010.




6   Annual Report and Accounts December 2009
    Chairman’s
    Statement                                  Distinguished Shareholders,

                                               I warmly welcome you to the 22nd Annual General Meeting
                                               of our bank, the first we are holding after the new common
                                               annual financial year ending on December 31. I want to
                                               thank you all particularly for finding time to attend another
                                               meeting, barely six months after the 21st AGM. Permit me to
                                               cite some developments within the global and domestic
                                               economies during the last six months of 2009 to enable us
                                               provide some background on the performance of the
                                               economy, the banking industry and our Bank. We will also
                                               look at the factors that have contributed in shaping our
                                               performance during this period.



                                               The Global Economy
                                               After a period of significant recession, many economies around
                                               the world began to show signs of recovery from the negative
                                               impacts of the global financial crisis in the second half of
                                               2009. The resurgence, spurred by huge fiscal stimuli and
                                               monetary policy interventions, was led by emerging economies
                                               such as China and India which defied weak domestic demand
                                               in their export markets to record resounding growth figures
                                               in the second half of the year. While China grew by 9.1% in
                                               the third quarter, countries like Brazil, India and Malaysia also
                                               posted decent growth numbers. These numbers influenced
                                               the consensus that the world economic crisis was in its dying
                                               phase and that generally the global economy was turning
                                               for the better. Though the growth figures in many high-
                                                 income economies were not as impressive as they were in
                                                   many of the emerging markets, critical macroeconomic
                                                    indicators were nonetheless positive enough to suggest
                                                     that, across a substantial part of the world, the worst
                                                     effects of the recession were over. In the third quarter,
                                                      real GDP grew by 0.6% in the United States while
                                                      Germany, France and Japan recorded 0.7%, 0.2%
                                                      and 1.3% growth respectively, some of these, the
                                                       first positive numbers in three quarters.

                                                     Growth has however not translated to jobs as
                                                     unemployment figures show. In the United States, the
                                                     unemployment record closed in December with almost
                                                     10% of the working population out of employment,
                                                     a 26-year peak. In the United Kingdom, the
                                                     unemployment figure stood at 7.8%, a record that
                                                     was last experienced in 1996.

                                                       The crude oil market was particularly bullish in the fall
                                                        compared to the first half of the year on the back
                                                         of rallying economic numbers and brightening
                                                           outlook in many markets around the world.
                                                              During the period, oil traded at an average of
                                                                 $67 price per barrel, about a 65%
                                                                     improvement over the mean figure in
                                                                        the first six months of 2009. Gross
                                                                          capital inflows to developing




8   Annual Report and Accounts December 2009
                                                                          Chairman’s Statement cont’d


countries began to gain momentum toward the end of 2009            investment rush from a host of international companies and
as uncertainty subsided and risk aversion declined. On an          multilateral organizations from Russia, China, India, South
annualized basis, the International Monetary Fund (IMF)            Korea and the European Union. Limited inflows from oil sales
reports that total gross inflows to developing countries           also precipitated a desperate resort to other funding sources
reached $435billion in the five months ending November             on the part of the Federal and State Governments. The Bond
2009, up from $218billion in the first half of the year. Towards   market became hyperactive in this respect as the Federal
year-end, other segments of the commodity market rallied           Government continuously issued bonds while many states
with gold leading the bullish run. Many investors, still shaken    joined. By October 2009, over N300 billion in bonds had
by the experience of the recent past, sought to hedge against      been issued by the Federal Government while six states had
inflation and fluctuation in market cycles by investing in         also rolled out or were at the stage of rolling out multibillion
metals. By September, gold was trading above $1,000 an             Naira bond packages.
ounce, the highest since the crisis began.
                                                                   In the same vein, government's efforts to enhance its revenue
In Sub-Saharan Africa, aggregate growth figures fell sharply       profiles fell far short of targets as tax receipts and other
from 5% in 2008 to 1.1% in 2009 against the background             internally generated revenues became susceptible to falling
of declining capital inflows and the volatility in commodity       incomes and corporate earnings. The revenue challenge
prices experienced in the first half of the year. South Africa     inspired a regular use of the Excess Crude Account out of
remained particularly vulnerable as a result of the high level     which the various arms of government drew over $7billion
of exposure of its financial market to the global economic         during the year to reflate the economy, boost investment
system. Other countries within the region, particularly            and enhance infrastructure. The effect of this reared its head
commodity exporters such as Nigeria, Angola and Botswana           also on the country's Foreign Exchange Reserve position
also showed signs of stress in their income portfolios in view     which dropped from $57.4billion in December 2008 to
of the declining fortunes of their exports in the world market     $43.3billion by the middle of October 2009.
relative to the preceding year.
                                                                   Productivity challenges occasioned by failing infrastructure,
Headline inflation recorded a sharp drop during 2009,              declining revenue potentials and hostilities in the Niger Delta
propelled by the slowdown in the global economy in contrast        notwithstanding, growth in non-oil sector propelled an
to the rapid growth in prices witnessed in 2008 as a result of     economic growth of 8.22% in the last quarter. Inflation
sharp rises in food and energy prices. The median rate of          however stood at an average of 11.42% during the period.
year-on-year consumer price inflation in high-income
countries, which peaked at 5.2% in mid- 2008, turned
negative in July, but was 0.6% in November 2009. The
decline notwithstanding, core inflation has remained relatively
stable in high-income countries. Short-term food security          In spite of the changing
concerns also subsided while most countries reduced or
eliminated export bans and other restrictions that were put in
                                                                   dynamics of the operating
place during the commodity price spike of 2008.
                                                                   environment, your bank was
The Domestic Economy
                                                                   able to maintain its streak of
Fiscal deliverables in 2009 were largely challenged by falling
receipts from oil sales as government's revenue profile suffered
                                                                   profitability even as it
severely from the twin effects of declining oil production         adjusted to the new demands
and volatile prices. Demand conditions in the global economy
which initially depressed commodity prices earlier in the year     of the banking business. For
improved after a series of government stimuli. As the crisis
eased in dimension, oil price moved from a low $33 per barrel      the six-month reporting
in February to almost $80 in the third quarter of 2009.
According to the then Managing Director/Chief Executive            period ended December
Officer of Nigerian National Petroleum Corporation (NNPC),
Dr. M. Barkindo, crude oil output level which had been             2009, Gross Earnings stood
largely constrained by the hostility in the Niger Delta improved
from less than 1.6 million bpd to 2.4 million bpd by year end      at N34.72 billion as against
on the back of receding militant activities in the Niger Delta.
                                                                   N72.27 billion for the twelve-
Government's announced package in the Amnesty
Programme for Niger Delta militants also spurred a flurry of       month period ended June
activities in the Niger Delta, hopefully preparatory to an
                                                                   30, 2009.

                                                                                                Annual Report and Accounts December2009   9
               Chairman’s Statement cont’d


               In the main, the power sector crisis continued unabated to
               the year end as the output target of 6,000 megawatts
                                                                                   Though the growth figures
               remained a tall order. We are however optimistic that, in the
               near term, the series of initiatives being put in place to reform
                                                                                   in many high-income
               this sector will begin to yield dividends in the interest of the
               economy.
                                                                                   economies were not as
                                                                                   impressive as they were in
               The Financial Market                                                many of the emerging
               The direction of the financial market in the second half of
               last year was largely dictated by the reform programmes             markets, critical
               embarked upon by the Central Bank of Nigeria (CBN) to
               refocus the industry and enhance its credibility within the         macroeconomic indicators
               international business community. The new CBN leadership,
               in a stroke of regulatory moves that reshaped the structure         were nonetheless positive
               of the industry, removed the managements of eight banks
               after industry-wide Special Examinations. The apex bank also        enough to suggest that,
               injected a total of N620 billion into these banks to strenghten
               their capital and liquidity.                                        across a substantial part of
               The CBN intervention reworked the dynamics of the credit            the world, the worst
               market and forced banks to reassess their risk management
               frameworks to conform to the emerging regulatory parameters.        effects of the recession
               The consequence of this was an industry-wide adoption of
               new cost models which entailed such measures as slashes in
                                                                                   were over.
               personnel and salaries as well as scaling down in expansion
               programmes. The most obvious effect was reflected in banks'
               results which recorded less than stellar performances in
               comparison with the immediate past years. As loan loss              report has been prepared under the new strict format required
               provisionings compelled by the CBN became an industry trend,        by the CBN which is closely tied to the International Financial
               losses began to appear in the profit and loss accounts of           Reporting Standard (IFRS) as opposed to the Generally
               banks in substantial numbers.                                       Accepted Accounting Principles (GAAP) that you have been
                                                                                   used to. Again, this is in compliance with a new regulatory
               The liquidity squeeze, which had been earlier anticipated in        requirement, which in our opinion, has been designed with
               the face of common adoption of uniform year-end by banks,           the best interest of the industry in mind.
               did not materialize. Indeed, the loan-deposit gap, which had
               hitherto been a challenge in the industry, narrowed as banks        In spite of the changing dynamics of the operating
               shied away from expanding credit even in the face of strong         environment, your bank was able to maintain profitability
               liquidity. The net injection proved a stabilizing factor for the    even as it adjusted to the new realities of the industry. For
               Naira as it maintained a trading bandwidth of around N150           the six-month reporting period ended December 2009, Gross
               to the United States Dollar for the better part of the second       Earnings stood at N34.72 billion as against N72.27 billion for
               half of 2009. On its part, the capital market continued on a        the twelve-month period ended June 30, 2009. On an
               downward trend as investors remained circumspect about              annualized basis, the December figure represents a 3.91%
               the recovery prospects of the market and its ability to deliver     decline against the Gross Earnings recorded in June. The
               short term returns. The All-Share Index fell by 22.46% to           decrease in revenue is attributable to the slowdown
               close at 20,827.17 in December 2009 as against the 26,861.55        experienced in all segments of our business, particularly the
               in June 2009.                                                       credit market, as a result of the need to reappraise our lending
                                                                                   structures in compliance with the new threshold in regulatory
                                                                                   standards.
               Financial Performance
               Before I go into the details of the December 2009 financial         On the earnings side, our bank posted N1.75 billion in profit
               performance, it is important to state that the result being         attributable to shareholders in contrast to the N1.83 billion
               reported covers only a six-month period from July to                recorded at the end of 2008/2009 financial year in June.
               December 2009 as against the twelve-month report presented          However, the annualized December 2009 figure shows a
               in the last financial year to June 2009. This shift in tradition    73% increase over the 12 months full year figure in June.This
               is compelled by the new CBN reporting guideline which               performance, though modest, is a demonstration of the
               provides for all banks to adopt December 31 as their financial      success of our cost management strategy which emphasizes
               year-end to foster stability and reduce pressure across the         a low-cost operating model in the face of shrinking revenue
               industry. It is equally worthy of note that the financial           flows and strict loan provisioning.



10   Annual Report and Accounts December 2009
                                                                          Chairman’s Statement cont’d


The challenge within the operating environment also showed         that proposed legislations and government programmes like
up slightly on the balance sheet side as total assets dropped      the Asset Management Corporation Bill, the Petroleum
within the period by 13.95% from N506.27 billion to N435.67        Industry Bill (PIB) and the pending deregulation policy will
billion. This notwithstanding, the bank succeeded in shielding     expand the scope of bankable activities in mainstream
its shareholders' funds from the threat posed by the harsh         economy as operators retool to remain competitive in the
business environment as total equity stood at N130.7 billion       emerging order.
at the end of 2009, against N129 billion in June 2009.
                                                                   At this point, I would like to share with you some changes
The details of the CBN Special Examination carried out in the      taking place within our industry. Of particular importance, in
banking industry and their results are already well known.         this respect, are CBN's guidelines in such areas as tenure of
Our bank was able to scale the hurdle unscathed and with           banks' directors/chief executives, repeal of the universal
our reputation intact. However, we have also drawn from            banking model, introduction of the holding company concept
the lessons of the exercise. To this extent, we have drawn up      and such other guidelines. As these regulations are
a framework that will firm up our risk management and loan         introduced, we have remained alive to the realignments that
administration processes to enable us remain at speed with         are required both in our corporate governance and operational
best practices and regulation guidelines. We are also reworking    structure as we address them on a case-by-case basis.
our control procedures to ensure that infractions are detected
at the earliest possible time and appropriately dealt with.        Since the commencement of the ongoing reform in the
                                                                   banking sector, we have been forward looking. This has
                                                                   become necessary, in our view, to enable us design appropriate
Future Outlook                                                     strategies for challenging the market and winning new
As the nation prepares for 2011 elections, we expect activities    businesses. With the measures we have put in place, we are
within the polity to move at a faster pace than the immediate      confident that as the industry transits into a new phase, our
past period when the absence of the President from office          bank will not just be a survivor but a bank of choice across
created an air of uncertainty around the investment climate        all segments of the value chain. In facing up to this mission,
and slowed down the implementation of key business                 we are not oblivious of the growing constraints in today's
decisions across many facets of the economy. In the emerging       market. This is why we shall continue to count on your
order, we see aggressive federal government machinery              unwavering support, advice and prayers.
pursuing fundamental reforms in such areas as power,
transportation, petroleum industry and the Niger Delta, given      Thank you for your support over the years, especially during
the limited time at the disposal of the present administration     this turbulent period.
and the critical condition of some of these sectors.
                                                                   God bless you all as we march into the future.
In the same vein, we are of the opinion that the present
trend of fiscal expansion will continue across all tiers of
government. In the main, policies and programmes of many
governments would be significantly influenced by the
approaching 2011 elections and the desire to influence the
electorate and direction of elections as the current
administration nears its end. In this regard, we intend to keep    Chief (Dr.) Christopher I. Ezeh, MFR
a close tab on the public sector end of our business with a        Chairman
view to taking advantage of the opportunities the ensuing
dispensation will throw up while avoiding the risks. As leading
developed and emerging market economies continue to
exhibit strong recovery fundamentals, crude oil is expected
to sustain a near term stability around the current price. This
performance provides a framework for continuing liquidity
flow and expansion in monetary aggregates. As a result, the
Naira is expected to maintain its value around the current
bandwidth, guided by CBN's interventionist approach
especially in periods of supply shocks.

In the short run, deposit rates are expected to remain low;
moderated by governments' expanding liquidity profile and
the comatose state of the credit market. We are hopeful that
as the situation of infrastructure improves and the banking
sector rebalances itself, the excess liquidity effect will show
up in falling lending rates to ease real sector access to credit
in the overall interest of the economy. We are also optimistic


                                                                                               Annual Report and Accounts December2009   11
     Chief Executive
     Officer’s Review                           Distinguished shareholders, Fellow Directors, Management of our Bank,
                                                Members of Team Fidelity, Ladies and Gentlemen.

                                                I am very pleased to welcome you to another Annual General Meeting
                                                of our bank, the 22nd in its history.
                                                The year 2009 was a year of significant change in the Nigerian Banking
                                                Industry, a lot of these changes I am sure you are already familiar with.

                                                In my Chief Executive’s review this year, I would like to share with you
                                                in some detail, insights into how your bank functions and elements of
                                                the strategies and structures that the Board and Management have
                                                put in place. These structures, in particular, are aimed at securing the
                                                success of our bank despite the challenges of the environment.

                                                Strategic Intentions and Business Review

                                                Short-Term Strategy:
                                                Recent changes in our operating environment, including changes in
                                                regulations, and a new government, have demanded that we respond
                                                by reviewing elements of our short-term strategy for fitness and purpose.
                                                You will recall that the Management and Board conducted a
                                                fundamental review of our markets and business in the first quarter of
                                                2008.

                                                The Management Retreat was held in Ada, Osun State, in February,
                                                2008, followed by a Board Retreat in Asaba, Delta State, in March of
                                                the same year.

                                                The outcome of these two Retreat Sessions was the adoption of our
                                                current guidance statements on which we have built and continue to
                                                propel our business.

                                                             Our Vision Statement remains ‘To be No.1 in every market
                                                              we serve and branded product we offer’.

                                                                      We continue to challenge ourselves in our Mission
                                                                       Statement that we want to ‘Make Financial
                                                                        Services Easy and Accessible to Our
                                                                         Customers’.

                                                                             These two Statements are the reasons why
                                                                              our 5,027 men and women wake up each
                                                                               morning to serve our customers and win
                                                                               new customers for our 170 branches and
                                                                                various business teams.

                                                                                  Two years ago, the Board approved
                                                                                   an expansionary agenda that has
                                                                                    seen our bank grow its business and
                                                                                     its capabilities in very many areas.
                                                                                       At the moment, we are one of
                                                                                        the fastest growing Nigerian
                                                                                          Banks with total bank
                                                                                           network projected to reach
                                                                                            200 outlets by first quarter


12   Annual Report and Accounts December 2009
                                                                 Chief Executive Officer’s Review cont’d


                                                                        I must also say that as part of our medium term strategy
The six-month period, despite                                           framework, we are strengthening our franchise products and
its challenges, has been most                                           alliance management capabilities which will leverage our retail
                                                                        distribution network to deepen our offerings to our customers.
useful. It has helped to                                                We would also continue to emphasize a self-funded balance
                                                                        sheet as a basis to extract more value and grow the wealth of
reconfirm the strength of our                                           our shareholders. These will entail extending, designing and
                                                                        selling new products as well as obtaining fresh franchises for
structures and strategies. It has                                       distribution through our product delivery channels that ride on

also taught lessons that will                                           our robust Enterprise-wide Risk Management Framework and
                                                                        ISO/IEC 27001:2005 Certification Project that are currently at
further strengthen us and make                                          various stages of completion.

our structures more robust.                                             Long-Term Strategy
                                                                        Further into the future, we intend to continuously expand our
                                                                        product distribution capacity in targeted markets to maintain
                                                                        our leading position through unrivalled customer service based
of 2011. We are also modifying our operations and cost model
                                                                        on deep segment experience and a solid technological platform.
to ensure bottom line growth in a time of reducing margins on
                                                                        This we will do by increasing participation in fast growing sectors
the industry’s lending business.
                                                                        including oil & gas, telecommunications, infrastructural financing
                                                                        and production expansion, using extensive distribution
We continue to look for and build alliances with appropriate
                                                                        infrastructure and technology platform to provide service/
outsource agents and service providers to our customers. This
                                                                        product based value chain offering and, leveraging our enhanced
increases our usefulness and value to customers and is good for
                                                                        balance sheet and extensive distribution network, to enter
Relationships.
                                                                        strategic relationships and new businesses for growth.
We remain mindful of the need to maintain a liquid balance
                                                                        Risk Management Initiatives
sheet at all times and to pursue Asset growth with the lessons
                                                                        As pointed out earlier, expansion within the immediate frontiers
of the recent past in mind. An example of our response is that
                                                                        of our business and the spate of changes in our regulatory
all our lending officers or ‘Responsibility Officers’ as we call
                                                                        environment have made banking processes and procedures more
them, are rated by the Executive Director, Risk Management,
                                                                        complex. In this regard, risk management remains a key
qualifying their credit skills. This guides us in making credit
                                                                        competitive tool for us. In recognition of this, we are
responsibility decision.
                                                                        strengthening our operational risk management and control
                                                                        framework. We are currently implementing the ISO/IEC
                                                                        27001:2005 Certification Project, which is the world's highest
As we move along the strategy execution curve, we will
                                                                        accreditation for information protection and data security. It is
continue to raise operational standards and implementation
                                                                        an overall security management and control framework for an
effectiveness in order to bring efficiency to optimal levels. In this
                                                                        organization's information security risk. The independent
regard, customer service delivery channels are being enhanced
                                                                        assessment is carried out by the United Kingdom-based registrars,
through the implementation of new technology initiatives and
                                                                        British Standards Institute - BSI- one of the few bodies in the
business process improvements. Additionally, our retail service
                                                                        world certified to perform ISO 27001 audits.
function is also being reworked to afford us greater opportunity
to continue to mobilise deposits while playing for a bigger stake
                                                                        ISO 27001 is the only auditable international standard which
in the Corporate, Small and Medium-scale Enterprise (SME)
                                                                        defines the requirements to ensure that sufficient security controls
segments of our business.
                                                                        are instituted within the certified organization. This platform
                                                                        enables continual scrutiny of the information security
Medium-Term Strategy
                                                                        management system in a manner that would provide confidence
The changing structure of regulation is not only altering the
                                                                        to us and our stakeholders on the security of our bank's data
dynamics in the economy but is also throwing up new
                                                                        and client information. By the time the certification process is
opportunities in some sectors like oil and gas,
                                                                        complete, we would have distinguished ourselves as the first
telecommunications, agriculture and fast-moving consumer
                                                                        bank in Nigeria to attain this prestigious status. The Bank of
goods. In the medium-term, we would continue to leverage our
                                                                        Ghana, Federal Reserve Bank of New York, Reserve Bank of
enhanced balance sheet, robust capital base and rapidly
                                                                        India, Bank of Indonesia, and Bank of Taiwan, IMF and World
expanding distribution network to play deep in these very
profitable business segments.


                                                                                                     Annual Report and Accounts December2009   13
           Chief Executive Officer’s Review cont’d


          We are currently implementing                                            providing the customer with convenience banking. By using
                                                                                   the Interactive Voice Response (IVR) mode, caller's needs can be
          the ISO/IEC 27001:2005                                                   gathered. The contextual information about the caller's profile
                                                                                   and history can then be routed through the most suitable self-
          Certification Project, which is                                          service or assisted resource to effectively resolve the interaction.

          the world's highest                                                      This demands increasing operational efficiency including the

          accreditation for information                                            ability to integrate multiple sites into the contact center to
                                                                                   ensure high-quality service across all customer service points
          protection and data security. It                                         and channels. We understand the challenges of increasing service
                                                                                   quality while working to reduce cost. But we also know that
          is an overall security                                                   the benefit to our customers would be immense. With the contact
                                                                                   centre, our trained customer service personnel and relationship
          management and control                                                   officers can use customers profile to provide personalized financial
                                                                                   services. We would also be able to integrate our resources,
          framework for managing an                                                contact center capabilities and internal systems to streamline
          organization's information                                               operations across the bank.


          security risk.                                                           Fidelity Visa Debit Card
                                                                                   As we strive to extract more value from our delivery channels,
                                                                                   we have continued to deploy more franchise products that
          Bank are a few of the financial institutions that have been similarly    provide convenience to our customers and potential returns to
          certified by the International Standard Organization.                    our shareholders. The Fidelity Visa Debit Card is a world class
                                                                                   and innovative product that has met the stringent Euro
          We are also in the process of implementing our Enterprise-wide           MasterCard Visa (EMV) standards and offers enhanced security
          Risk Management Framework (ERM) project which commenced                  and convenience to our customers. This is also in compliance
          in 2007 with the appointment of Deloitte South Africa to review          with CBN's recent policy that all banks' cards be made EMV
          our risk management processes against the backdrop of                    compliant in line with the emerging trend. Fidelity Visa Debit
          international best practices. This project is aimed at achieving full    Cards can be used both locally and internationally, in Naira and
          compliance with Basel II risk management framework by providing          foreign currencies and saves the customer the inconvenience of
          a framework for enterprise-wide risk management for the bank.            carrying cash or more than one card during international travel.
                                                                                   Better still, our customers can have their Fidelity Visa Card
          As an extension of the above, we have acquired and deployed              attached to two accounts: Naira current account and domiciliary
          Credit Quest, an end-to-end Credit Risk Management and risk              account.
          processing software. Our objective of acquiring and implementing
          Credit Quest is to ensure that we automate all our credit risk
                                                                                   Conclusion
                                                                                   The six-month period, despite its challenges, has provided us
          processes of loan origination, approval, tracking, administration,
                                                                                   with insights at various levels. It has helped to reconfirm the
          monitoring, reporting and collection in order to achieve a more
                                                                                   strength of our structures and strategies. It has also taught
          efficient credit risk process. In addition, it will enable us respond
                                                                                   lessons that will further strengthen us and make our structures
          quickly to credit requests and implement best practice in credit
                                                                                   more robust. In the days ahead, we will leverage these experiences
          risk management.
                                                                                   and work with relevant strategic partners and platforms to
          Customer Service: Fidelity Care Centre                                   achieve our set goals. In all, we foresee a future that is much
          The need for banks to differentiate themselves by offering               brighter than the recent past and invite all our stakeholders to
          personalized customer service has become more imperative now             join us on this mutually-rewarding voyage.
          than ever before as the competitive environment tightens. The
          task of keeping existing current customers and winning new               Thank you.
          ones has remained daunting as banks strive to keep costs low in
          order to improve profitability. It is in this regard and to strengthen
          our customer service experience and provide more convenience
          to our customers, that we have deployed a Fidelity Care Centre -
          our customer contact platform that provides immediate feedback
                                                                                   Reginald Ihejiahi
                                                                                   Managing Director & Chief Executive Officer
          and solution to our customers' enquiries, requests and complaints,
          in order to reduce customer interface at the branches while


14   Annual Report and Accounts December 2009
                                    Risk Management Disclosures
                                                                      Risk Management Framework
                                                              For Period ended 31 December 2009

The following key principles govern our approach to                Level 2 - Senior Management function is performed by the
enterprise-wide risk management:                                   Management Credit and Investment Committee (MCIC), Credit
     Our risk management policies and procedures are               Review Committee (CRC), Loan Recovery Committee (LRC),
     designed to identify, assess, measure, mitigate, monitor,     Asset and Liability Management Committee (ALCO),
     manage and report significant risk exposures in our           Operational Risk Review Committee (ORRC), Management
     consolidated group. The policies are subject to annual        Profitability Report Committee (MPR), The Chief Risk Officer,
     reviews.                                                      Risk Management (CRO), and Heads of Credit Risk
     We manage all classes of banking risk broadly categorized     Management, ALM/Market Risk Management and
     into credit, market, liquidity and operational risk           Operational Risk Management.
     independently but in a co-coordinated manner at all
     relevant levels within our organization.                      Level 3 - This is performed by all enterprise-wide Business and
                                                                   Support Units. Business and Support Units are required to
ORGANIZATION OF RISK MANAGEMENT                                    comply with all risk policies and procedures and to manage
Enterprise-wide risk management roles and responsibilities are     risk exposures that arise from daily operations.
assigned to stakeholders in the Bank at three levels as follows:
                                                                   Our Corporate Audit Division assists the Board Audit
Level 1 - Board/Executive Management oversight is performed        Committee by providing independent appraisal of the Bank's
by the Board of Directors, Board Risk Committee (BRC), Board       risk framework for internal risk assurance. The Division assesses
Credit Committee (BCC), Board Audit Committee and                  compliance with established controls and enterprise-wide risk
Executive Management Committee (EXCO).                             management methodologies. Significant risk related infractions
                                                                   and recommendations for improvement in processes are
                                                                   escalated to relevant Management and Board committees.



 The Risk Management
 Organogram of the Bank is as               Board of Directors
                                                                                                              Level 1
 follows:


                 Board Risk                Board Credit                Board Audit                      Executive
                 Committee                  Committee                  Committee                       Committee



     Management                                                    Asset & Liability     Operational         Management
                           Credit Review      Loan Recovery
     Credit & Investment                                           Management            Risk Review         Profitability Report
                           Committee          Committee
     Committee                                                     Committee             Committee           Committee




                                               Chief Risk Officer                                             Level 2




                                                                                     Head,
                    Head,                         Head, ALM /
                                                                                   Operational
                  Credit Risk                     Market Risk
                                                                                      Risk
                 Management                       Management
                                                                                   Management
                    Group                           Group
                                                                                     Group




                    Branches                     Business Units                        Support Units


                                               Support Function                                               Level 3
                           Human Resources
                                                                   Corporate Audit
                             Management



                                                                                                 Annual Report and Accounts December2009   15
               Risk Management Disclosures cont’d
               Risk Management Framework
               For Period ended 31 December 2009



               ENTERPRISE RISK PHILOSOPHY
               Fidelity Enterprise Risk Mission
               "To proactively anticipate and stem enterprise-wide losses that may be occasioned in the prosecution of the Bank's mission
               of making banking services easy and accessible "

               Risk Culture
               The Bank's risk culture proactively anticipates and stems losses that may arise from its banking risk underwriting. This culture
               evolved out of the understanding that the Bank is in a growth phase. This phase requires a strong risk management culture
               that supports growth objectives. By design therefore, the Bank operates a MANAGED risk culture, which places emphasis on
               a mixture of GROWTH and RISK CONTROL to achieve corporate goals without compromising asset and service quality.

               Risk Appetite
               Risk appetite determines the quantum of risk that the Bank would assume in pursuit of its business objectives at any point in
               time. The Bank's risk appetite is defined quantitatively at two levels: at the Enterprise level and at the Business/Support Unit
               level.

               To give effect to the above, the Board of Directors of the Bank set target Key Performance Indicators (KPIs) at both Enterprise
               and Business/Support unit levels based on recommendations from the Executive Management Committee (EXCO). At the
               Business /Support unit level, the Enterprise KPIs are cascaded to the extent that the contribution of each Business/Support Unit
               to risk losses serve as input for assessing the performance of the Business/Support Unit. The Bank sets tolerance limits for
               identified Key Risk Indicators (KRIs) which serve as proxy for the risk appetite for each risk area and Business / Support Unit.
               Tolerance levels for KRIs are jointly defined and agreed upon by the Business/Support Units and are subject to annual reviews.

               CREDIT RISK MANAGEMENT
               The Bank defines credit risk as the risk of transactions that give rise to actual, contingent or potential claims against any
               counter-party, borrower or obligor. Credit risk arises anytime the Bank's funds are extended, committed, invested or otherwise
               exposed through actual or implied contractual agreements. This is the largest single risk we carry as a Bank.

               We distinguish between two kinds of credit risk:
                   Default Risk is the risk that counter-parties fail to meet contractual payment obligations.
                   Settlement Risk is the risk that the settlement or clearance of transactions will fail. It arises whenever the exchange of
                   cash, securities and/or other assets is not simultaneous.

               We measure and manage credit risk following the principles below:
                   Consistent standards as documented in our credit policies and procedures manual are applied to all credit applications and
                   credit approval decisions.
                   Credit facilities are approved for counter-parties only if underlying requests meet our standard risk acceptance criteria.
                   Every extension of credit or material change to a credit facility (such as its tenor, collateral structure or major covenants)
                   to any counter-party requires approval at the appropriate authority level. The approval limits are as follows:

           Approving Authority                                              Rating Category Based Approval Limits
                                                AAA                         AA                        A                       BBB to CCC
           Full Board                           Exposure above              Exposure above            Exposure above          Exposure above
                                                N3 billion                  N2 billion                N1 billion              N500 million

           Board Credit Committee               Exposure between            Exposure between         Exposure between         Exposure between
                                                N1 billion and N3 billion   N500 million and         N350 million and         N250 million and
                                                                            N2 billion               N1billion                N500 million

           Management Credit and                Exposure below              Exposure below           Exposure below           Exposure below
           Investment Committee                 N1 billion                  N500 million             N350 million             N250 million



                      We assign credit approval authorities to individuals according to their qualification, experience, training and quality of
                      previous credit decisions. These are also reviewed periodically.
                      We measure and consolidate all our credit exposures to each obligor on a global basis. Our definition of an "obligor"
                      includes a group of individual borrowers that are linked to one another by any of the criteria we have established,
                      including capital ownership, voting rights, demonstrable control, other indication of group affiliation; or are jointly and
                      severally liable for all or significant portions of the credit we have extended.



16   Annual Report and Accounts December 2009
                                                            Risk Management Disclosures cont’d
                                                                                                   Risk Management Framework
                                                                                            For Period ended 31 December 2009



      Our respective business units are required to implement credit policies and procedures while processing credit approvals
      including those granted by Management and Board Committees.
      Each business unit is responsible for the quality, performance and collection of its credit portfolio including those
      approved by the Management and Board Committees.
      Our Credit Inspection and Credit Administration departments regularly undertake independent audit and credit quality
      reviews of credit portfolios held by business units.

Credit Risk Ratings
A primary element of our credit approval process is a detailed risk assessment of every credit associated with a counter-party.
Our risk assessment procedures consider both the credit worthiness of the counter-party and the risks related to the specific
type of credit facility or exposure. This risk assessment not only affects the structuring of the transaction and the outcome
of the credit decision, but also influences the level of decision-making authority required to extend or materially change the
credit and the monitoring procedures we apply to the on-going exposure.

We have our own in-house assessment methodologies and rating scale for evaluating the creditworthiness of our counter-
parties. Our programmed 9-grade rating model was developed in collaboration with Agusto & Company, a foremost rating
agency in Nigeria, and enables us to compare our internal ratings with common market practice and ensures comparability
between different portfolios of our institution. We generally rate all our credit exposures individually. The rating scale and its
mapping to the Standard and Poors agency rating scale is as follows:


  S/N               Internal Rating            Interpretation                                                  Mapping to External
                    Categories                                                                                 Rating (S&P)
  1                 AAA                        Impeccable financial condition and overwhelming
                                               capacity to meet obligations in a timely manner                 AAA
  2                 AA                         Very good financial condition and very low likelihood
                                               of default                                                      AA
  3                 A                          Good financial condition and low likelihood of default          A
  4                 BBB to BB                  Satisfactory financial condition and adequate capacity
                                               to meet obligations                                             BBB to BB
  5                 B to CCC                   Weak financial condition and capacity to repay is
                                               in doubt and may be contingent upon refinancing                 B to D


Credit Limits
Portfolio concentration limits are set by the Bank to specify maximum credit exposures we are willing to assume over given
periods. The limits reflect the Bank's credit risk appetite. The parameters on which portfolio limits are based include limits per
obligor, product, sector, industry, rating grade, geographical location, type of collateral, facility structure and conditions of
the exposure.

Monitoring Default Risk
We monitor all our credit exposures on a continuing basis using the risk management tools described above. We also have
procedures in place to identify at an early stage credit exposures for which there may be an increased risk of loss. Counter-
parties, that on the basis of the application of our risk management tools, demonstrate the likelihood of problems, are
identified well in advance so that we can effectively manage the credit exposure and maximize the recovery. The objective
of this early warning system is to address potential problems while adequate alternatives for action are still available. This early
risk detection is a tenet of our credit culture and is intended to ensure that greater attention is paid to such exposures. In
instances where we have identified counter-parties with potential problems, the respective exposure is placed on a watch-list.

Provision against credit risk
Provision is made in accordance with the Prudential Guidelines for Licensed Banks issued by the Central Bank of Nigeria for
each account that is not performing in accordance with the terms of the related facility as follows:.

Interest and/or Principal outstanding for over:                         Classification:            Provision:
90 days but less than 180 days                                          Substandard                10%
180 days but less than 360 days                                         Doubtful                   50%
360 days and over                                                       Lost                       100%




                                                                                                 Annual Report and Accounts December2009   17
               Risk Management Disclosures cont’d
               Risk Management Framework
               For Period ended 31 December 2009




               Credit Risk Capital Charge                                           Our liquidity risk management approach starts at the intra-
               The Bank has commenced implementation of the Standardized            day level by managing the daily payments, forecasting cash
               Approach to credit risk capital adequacy computation in line         flows, Settlement Clearing and Central Bank Account
               with Pillar 1 of Basel II Accord.                                    relationships. It then covers tactical liquidity risk management
                                                                                    dealing with the access to unsecured funding sources and
               MARKET AND LIQUIDITY RISK MANAGEMENT                                 the liquidity characteristics of our asset inventory. Finally,
               Substantially, the banking business in which we are engaged          the strategic perspective comprises the determination of
               is subject to the risk that financial market prices and rates will   maturity profile and gaps that may exist between all assets
               move and result in profit or loss for us. Market risk arises         and liabilities on our balance sheet.
               from the probability of adverse movements in financial market
               prices and rates. Our definition of financial market prices in       Short-Term Liquidity
               this regard refers to interest rates, equity prices, foreign         Our reporting system tracks cash flows on a daily basis. This
               exchange rates, commodity prices, the correlations among             system allows management to assess our short-term liquidity
               them and their levels of volatility. Interest rate and equity        position in each location by currency and products. The
               price risks consist of two components each: general risk,            system captures all of our cash flows from transactions on
               which describes value changes due to general market                  our balance sheet, as well as liquidity risks resulting from off-
               movements, and specific risk which has issuer-related causes.        balance sheet transactions. We take account of products
                                                                                    that have no specific contractual maturities by extrapolating
               We assume market risk in both our trading and non-trading            from their historical behaviour of cash flows.
               activities. We underwrite market risks by making markets
               and taking proprietary positions in the inter-bank, bonds,           Asset Liquidity
               foreign exchange and other security markets. The Bank                The asset liquidity component tracks the volume and
               separates its market risk exposures between the trading and          booking location of our inventory of unencumbered liquid
               the banking books. Overall authority and management of               assets, which we can use to raise liquidity in times of need.
               market risk in the Bank is vested in the Assets and Liability        The liquidity of these assets is an important element in
               Management Committee (ALCO).                                         protecting us against short-term liquidity squeezes. We keep
                                                                                    a portfolio of highly liquid securities in major currencies around
               Our ALM / Market Risk Group assists the Board Risk                   the world to supply collateral for cash needs associated with
               Committee (BRC) and the Assets and Liability Management              clearing activities.
               Committee (ALCO) in setting risk limits. Established risk limits
               monitored on a daily basis by our Market Risk Group include          Funding Diversification
               intra day, currency, open position, dealers, deposit placement,      Diversification of our funding profile in terms of investor
               stop loss and management action trigger limits. Daily positions      types, regions, products and instruments is an important
               of our trading book are marked-to-market to enable the               element of our liquidity risk management framework. Our
               Bank obtain an accurate view of its trading portfolio exposure.      core funding resources are retail, commercial and corporate
               Financial market prices used in the mark-to-market exercise          customer deposits and our long-term tier 1 capital funds.
               are independently verified to the financial markets by the
               Market Risk Group.                                                   Market Risk Capital Charge
                                                                                    The Bank has commenced implementation of the Standardized
               Liquidity Risk                                                       Approach to computing Market Risk capital charge in line
               Liquidity management safeguards the ability of the Bank to           with the requirements of Pillar 1 of Basel II Accord for capital
               meet all payment obligations when they come due. Our                 adequacy calculations.
               liquidity risk management framework has been an important
               factor in maintaining adequate liquidity and a healthy funding       Operational Risk
               profile during the year.                                             Operational risk is the potential for loss arising from inadequate
                                                                                    or failed people, processes and systems and from external
               Liquidity Risk Management Framework                                  events. This definition includes legal and regulatory risk, but
               Our Corporate Treasury is responsible for liquidity risk             excludes strategic and reputational risk.
               management. Our liquidity risk management framework is
               designed to identify, measure and manage our liquidity risk          The scope of operational risk management in the Bank covers
               position at all times. Underlying Assets and Liabilities             risk exposures that may lead to unavailability of service,
               Management policies and procedures are reviewed and                  information deficiency, financial loss, increased costs, loss of
               approved regularly by the Assets and Liability Management            professional reputation, failure to keep or increase market
               Committee (ALCO).                                                    share, risks which result in the imposition of sanctions on the




18   Annual Report and Accounts December 2009
                                                            Risk Management Disclosures cont’d
                                                                                                   Risk Management Framework
                                                                                            For Period ended 31 December 2009




Bank by regulators or legal proceedings against the Bank by        within our predefined Event Escalation Matrix enables risk
third parties.                                                     incidents to be reported to designated Event Identifiers, Event
                                                                   Managers, Event Approvers and Action Owners that manage
Organizational Set-up                                              each risk incident from point of occurence to closure.
Operational Risk Management is an independent risk
management function within Fidelity Bank. The Operational          Risk and Control Self Assessments (RCSA)
Risk Review Committee is the main decision-making committee        We implement a quantitative methodology for our Risk and
for all operational risk management matters and approves our       Control Self Assessments, which support collection of
Bank's standards for identification, measurement, assessment,      quantitative frequency and severity estimates. Facilitated
reporting and monitoring of operational risk.                      top-down RCSA workshops are used by the bank to identify
                                                                   key risks and related controls at business unit levels. During
Operational Risk Management is responsible for defining the        these workshops business experts and senior management
operational risk framework and related policies while the          identify and discuss key risks, controls and required remedial
responsibility for implementing the framework as well as the       actions for each respective business unit and the results are
day-to-day operational risk management lies with our business      captured within the operational risk database for action
and support units. Based on this business partnership model        tracking.
we ensure close monitoring and high awareness of operational
risk.                                                              Key Risk Indicators (KRIs)
                                                                   We measure quantifiable risk statistics or metrics that provide
Operational Risk Framework                                         warning signals of risk hotspots in our entity. We have
As is common with all businesses, operational risk is inherent     established Key Risk Indicators with tolerance limits for core
in all operations and activities of the Bank. We therefore         operational groups of the Bank. Our KRI database integrates
carefully manage operational risk based on a consistent            with the Loss Data Collection and Risk Control Self Assessment
framework that enables us to determine our operational risk        models and systems to provide red flags that typically inform
profile in comparison to our risk appetite and to define risk      initiatives for risk response actions in the Bank.
mitigating measures and priorities.
                                                                   Business Continuity Management (BCM)
We apply a number of techniques to efficiently manage              Our BCM plans assist us in building resilience for effective
operational risk in our business, for example:                     response to catastrophic and business disruption events. In
As part of our strategy for making enterprise risk management      broad categories, the plans cover disaster recovery, business
our discriminating competence, the Bank in collaboration           recovery, business resumption, contingency planning and
with the risk consultancy practice of Deloitte, South Africa,      crisis management events. Our event specific BCM plans which
has redefined business requirements across all networks and        are tested semi-annually deal with threats of fire, flood,
branches in the following key areas:                               robberies, loss of utilities, information security breaches, civil
                                                                   disturbances, and disruption from outsourced service partners
Process/Risk Mapping                                               amongst others.
With the objective of engendering standardization and
facilitation of risk communication among our team members,         Operational Risk Capital Charge
key processes of the Bank have been mapped to procedural           The Bank is currently implementing the Standardized
levels with inherent risks and controls identified and overlaid.   Approach to computing Operational Risk Capital Charge in
Process maps and documentation developed from this                 line with Pillar 1 of Basel II Accord for capital adequacy
implementation assists the Bank in identifying process             calculations.
bottlenecks, pinpointing redundancies, locating waste and
processes for optimisation.

Loss Data Collection
The Bank implements an event driven Loss Data Collection
(LDC) system designed to facilitate collection of internal loss
data triggered at the occurrence of a loss event anywhere
within the divisions of the Bank. The LDC system captures
data elements, which discriminate between boundary events
related to credit, market and operational risk. The system
facilitates collection of loss data arising from actual losses,
potential losses and near misses. Work-flow capabilities built




                                                                                                 Annual Report and Accounts December2009   19
                              Chief Christopher I. Ezeh        Reginald Ihejiahi             Willie M. Obiano
                              (Chairman)                       (Managing Director & CEO)     (Executive)




                                      Mrs. Bessie N. Ejeckam   Alhaji Bashari M. Gumel     Mr. Stanley Lawson
                                      (Non Executive)          (Independent Director)      (Independent Director)




20   Annual Report and Accounts December 2009
                                                Board of Directors




Abdul-Rahman Esene      Ik. Mbagwu                   Onome Joy Olaolu
(Executive)             (Executive)                  (Executive)




Dim Elias Nwosu        Chief Nnamdi Oji             Arch. Augustine W.U. Okam
(Non Executive)        (Non Executive)              (Non Executive)




Mr. Kayode Olowoniyi   Ichie Nnaeto Orazulike        Mal. Umar Yahaya
(Non Executive)        (Non Executive)               (Non Executive)

                                                   Annual Report and Accounts December2009   21
               Directors' Profiles




               CHIEF CHRISTOPHER EZEH MFR - CHAIRMAN
               A Fellow of the Institute of Chartered Accountants of Nigeria (ICAN); Institute of Directors (IOD); Institute of Cost and
               Management Accountants (CMA) and a member of the British Institute of Management, Chief Ezeh, who also holds a Doctor
               of Business Administration (DBA) Honoris Causa, from Enugu State University of Technology. He started his career with
               Chrysler (UK) Limited in 1968. He then joined Shell BP, Zambia, before leaving for John Holt (Nig) Ltd in 1976, becoming Group
               Managing Director (in 1986) and later, Chairman, a position he has held from 2001 to date.


               REGINALD IHEJIAHI - MANAGING DIRECTOR & CHIEF EXECUTIVE
               Reginald Ihejiahi holds a B.Sc in Accounting from Ahmadu Bello University Zaria and M.Sc. Finance, from the London School
               of Economics & Political Science, University of London. He is a Fellow (FCCA) of the Chartered Association of Certified
               Accountants, UK and a Fellow of the Chartered Institute of Bankers of Nigeria (CIBN). He has varied working experience in
               different aspects of banking, from Commercial to Credit Risk, Operations and Information Technology. Reginald has also
               served on the boards of many financial services companies and he is the Chairman of the board of FSL Group - a subsidiary
               of Fidelity Bank Plc.


               WILLIE OBIANO - EXECUTIVE DIRECTOR
               Chief. Obiano holds a B.Sc degree in Accounting and an MBA both from the University of Lagos. He is also a Fellow of the
               Institute of Chartered Accountants of Nigeria(ICAN). He started his banking career as a supervisor with First Bank of Nigeria
               in 1981 from where he moved to Texaco Nigeria Plc, an oil marketing company as an accountant. He rose to the position of
               Chief Internal Auditor in Texaco before joining Fidelity. In Fidelity, he has worked in various departments ranging from
               operations to marketing and internal audit. He has attended many courses within and outside Nigeria including the UK, US and
               Malta.


               ABDUL-RAHMAN ESENE - EXECUTIVE DIRECTOR
               Abdul-Rahman Esene is an Accounting graduate of Wake Forest University, USA. He has an MBA from Sam Houston State
               University, Texas, USA and a Diploma from the British Institute of Bankers. He started his career at Georgia Pacific Corporation
               and has worked in a number of institutions including the Nigerian Air force, Northern Nigeria Investment Company, International
               Merchant Bank (IMB) as Manager, Corporate Finance Department before joining FSB International Bank Plc in 1996 as a Senior
               Manager rising to be Managing Director of FSB before the consolidation.


               IK MBAGWU - EXECUTIVE DIRECTOR
               Ik Mbagwu holds a Combined Honours degree in Geography & Economics as well as a Master's degree in Development
               Economics from Reading University, Berkshire (UK). He has attended management courses in notable institutions in Nigeria and
               overseas. Starting his career as a tax senior in Arthur Andersen & Co, Ik moved on to Nigerian American Bank Limited (Bank
               of Boston) before joining the then Fidelity Union Merchant Bank Ltd in 1993, rising to the rank of General Manager. In 2001,
               he moved on to Citizens International Bank as an Executive Director. He rejoined the new Fidelity Bank as Executive Director
               in 2006.




22   Annual Report and Accounts December 2009
                                                                                Directors' Profiles cont’d




ONOME JOY OLAOLU - EXECUTIVE DIRECTOR
Onome Olaolu holds a B.Sc in Accounting from the University of Benin and M.Sc., Banking & Finance, from the University
of Lagos. She is a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN) and also of the Chartered Institute of
Bankers in Nigeria. She worked at Texaco Nigeria Plc from 1985-1990 from where she moved to the then Nigerian Intercontinental
Merchant Bank Ltd. In 1994 she moved to Metropolitan Merchant Ltd before joining Fidelity bank in 1997 as a Senior
Manager, rising to the position of General Manager, Risk Management Sector in 2006. She was appointed to the Board in July
2009.


MRS. BESSIE N. EJECKAM
Mrs. Ejeckam holds a B.Sc. in Accounting from Bloomfield College, Bloomfield, New Jersey, U.S.A. She worked in the Foreign
Exchange Department of PZ Industries Limited from 1982 to 1984, from where she moved to First City Finance Company
Limited. In 1988, she joined Fidelity Bank as the Head of Domestic Operations Unit from where she rose to Head of Internal
Control in 1996. She resigned from the Bank in 1998 for private business.


ALHAJI BASHARI MOHAMMED GUMEL
Bushari M. Gumel is an alumnus of the Ahmadu Bello University, Zaria. He holds a Post Graduate Diploma, Public & Social
Administration South Devon Technical College, Torquay, England and is a seasoned administrator who began his career as a
civil servant in 1968 and rising to the position of a permanent secretary until 1980 when he withdrew his services from the
state government to venture into private business. He has sat on the board of several companies and is currently the Chairman,
Jafa Foam Products Limited.


MR. STANLEY I. LAWSON
Stanley Lawson holds an M.Sc in Petroleum Geology and MBA in Finance both from the University of Ibadan. He started his
career in the Oil & Gas industry as a Resident Geologist/Drilling from where he moved to the Banking/Finance industry, rising
to the position of Managing Director/Chief Executive Officer of erstwhile African Express Bank in 2003. He moved to the
Nigerian National Petroleum Corporation (NNPC) between 2004 - 2009 where he was appointed Group Executive Director,
Finance & Accounts. Mr. Lawson has attended several leadership and management courses abroad.


DIM ELIAS E. NWOSU
Dim Nwosu attended St. Paul's Teachers' Training College, Oghe, Enugu State. He rose from the position of a Sales Assistant
at Geoelis Trading Company, Onitsha to Sales Manager fully in charge of the management of the company and later became
the Chairman and Chief Executive - a position he holds till date. He is a notable member of the Nigeria Cable Manufacturers
Association and a member of the Nigeria Chamber of Commerce, Industry & Agriculture (NACCIMA). He has attended various
seminars and workshops both in Nigeria and abroad.




                                                                                             Annual Report and Accounts December2009   23
               Directors' Profiles cont’d




               CHIEF NNAMDI I. OJI
               Mr. Oji holds a National Diploma in Business Studies from Brookland Technical College, Surrey, England and a B.A. in
               Accountancy from the University of North London, England. He also holds a Post Graduate Certificate in Textile Technology
               from Bolton Institute of Technology, Lancashire, England. He is presently the Finance Director of Rosies Group of Companies
               in Aba, Abia State. He sits on the boards of numerous other companies.


               ARC. A. W. U. OKAM
               Arc. Okam holds a degree in Architecture. A Fellow of the Nigerian Institute of Architects(NIA), he began his professional
               career in 1964 when he joined the Public Service of Eastern Nigeria as an Architect. He worked at Ekwueme Associates
               (Architects and Town planners) in various capacities and later became a partner of the prestigious firm (1971-1979). He sat on
               the board of Fidelity Union Bank Limited (1996-2001) and is currently Principal Partner, Integrated Consultants.


               MR. GABRIEL KAYODE OLOWONIYI
               Gabriel Olowoniyi is an alumnus of the Federal Polytechnic, Ado-Ekiti and the Institute of Chattered Secretaries and
               Administrators, London. A Chartered Secretary and Administrator of long standing, Mr Olowoniyi is currently a Director of
               Amazing Inspiration Media Limited, among many other companies.


               ICHIE NNAETO ORAZULIKE
               Ichie Nnaeto Orazulike holds a B.Sc in Accountancy from the University of Nigeria, Enugu Campus. He began private business
               in 1993 when he started Genesis Foods Limited, a frontline Industrial catering services company. His vast chain of other
               successful businesses includes Orazulike Trading Company Limited; Stanchions Nigeria Limited and Genesis Deluxe Cinemas
               Limited.


               MALLAM UMAR YAHAYA
               Umar Yahaya holds a Bachelor's and a Master's degrees in Business Administration from Ahmadu Bello University, Zaria. He has
               an Advanced Diploma in Management from Harvard Business School, Boston Massachusetts, and an Executive Management
               Diploma in Strategy & Organisation from Stanford Graduate School of Business, USA. He was an Executive Director, First Bank
               of Nigeria Plc, responsible for policy formulation, strategic direction and day-to-day management of sector posting; and
               Managing Director /Chief Executive; New Africa Merchant Bank (NAMB) from 1992 to1997.




24   Annual Report and Accounts December 2009
                               Management Team




Reginald Ihejiahi       Managing Director & Chief Executive Officer
Willie Obiano           ED, Business Banking
Abdul-Rahman Esene      ED, Investment Banking & Public Sector
Ik Mbagwu               ED, Shared Services
Onome Olaolu            ED, Risk Management
Yvonne Isichei          GM, Consumer Banking
Emeka Onyenacho         GM, Corporate Banking
Oluwatobi Lawal         GM, Public Sector, Lagos
Emeka Obioha Obiagwu    MD, Fidelity Securities Ltd. (FSL) Group
Chijioke Ugochukwu      Company Secretary/Legal Adviser
Idris Yakubu            DGM & Head, North
Shehu Abubakar          DGM & Head, Abuja, Public Sector
Charles Okoro           DGM & Head, South East II Region/South South Region
John Obi                MD, Fidelity Pension Managers Ltd.
Samuel Obijiaku         DGM Transaction Support Division
Femi Aderibigbe         DGM & Head, Local Funding
Oludayo Onasanya        DGM & Head, Telecoms, Aviations & Hospitality
Chimaobi Onwuka         DGM & Head, Corporate Services
Gabriel Anajekwu        Head, South East 1 Region
Simon Peter Opara       Head, Lagos Mainland Region
Raymond Alenoghena      Head, Remedial Management
Dr. Mike Aigbiremolen   Head, Midwest Region
Chineze Osakwe          Head, Treasury
Boye Ogunmolade         Head, Inspection & Audit (Chief Inspector)
Victor Abejegah         Head, Domestic Operations
Louisa Olaloku          Head, Credit Risk
Lazarus Okolie          Head, Network Management
Ralph Omoregie          Head, Business Process Automation
Taiwo Joda              Head, Large Corporates & Multinations
Carol Yinka Ogbonmide   Head, Privatized Corporate, Transport & Shipping
Ken Opara               Head, Affinity Banking
Remmy Nwachukwu         Head, Corporate Solutions
Emma Esinnah            Head, Marketing & Communications
Hassan Imam             Head, Abuja Region
Audrey Brown            Head, Multinationals Group
Andrew Onyilokwu        Head, Financial Controls
Francis Ikenga          Head, Strategy
Godwin Achi             Head, Project Finance & Business Advisory




                                                        Annual Report and Accounts December2009   25
               Report of the Directors
               For The Year Ended 31 December 2009




               The Directors are pleased to submit their report on the affairs of Fidelity Bank Plc ("the Bank") and its subsidiaries ("together
               the Group"), together with the financial statements and auditors reports for the period ended 31 December, 2009.

               1.     RESULTS
                                                                                                                          N'm
                         The Group's profit for the year after taxation was                                             1,557
                         Minority interest                                                                                191
                         Profit after taxation and minority interest                                                    1,748
                         Less appropriation:
                         Transfer to Statutory Reserve                                                                    424
                         Transfer to General Reserve                                                                    1,324

               2.     LEGAL FORM
                      The Bank was incorporated as a private limited liability company on November 19 1987. It obtained a merchant banking
                      license on 31 December 1987 and commenced banking operations on 3 June 1988. The Bank converted to a
                      commercial bank on July 16 1999 and registered as a public limited company on 10 August 1999. The Bank obtained
                      its universal banking license on 6 February 2001 and its shares were quoted on the Nigerian Stock Exchange on 17 May
                      2005.

               3.     PRINCIPAL BUSINESS ACTIVITIES
                      The Bank provides banking and other financial services from its Headquarters in Lagos and 170 branches. The Bank has
                      the following subsidiaries:
                      i.    Fidelity Securities Limited
                      ii. Fidelity Pension Managers Limited
                      iii   Fidelity Bureau De Change Limited (yet to commence operation)

                      The Bank prepares consolidated financial statements.

               4.     BENEFICIAL OWNERSHIP
                      The Bank is owned 100% by Nigerian Citizens and Corporations.

               5.     SHARE CAPITAL
                      The range of shareholding as at December 31, 2009 is as follows:

                                 Range                    No. of Holders        %     Holders             Units   % Holding          Units Cum.
                                                                  Cum.                 Cum.
                      1                  -      1,000            95,524    21.28%     95,524        81,499,876       0.28%          81,499,876
                      1,001              -      5,000           183,926    40.98%    279,450       512,469,880       1.77%         593,969,756
                      5,001              -      10,000           59,999    13.37%    339,449       495,916,806       1.71%       1,089,886,562
                      10,001             -      50,000           78,387    17.46%    417,836     1,863,828,384       6.43%       2,953,714,946
                      50,001             -      100,000          14,863     3.31%    432,699     1,189,000,748       4.10%       4,142,715,694
                      100,001            -      500,000          12,684     2.83%    445,383     2,840,134,133       9.80%       6,982,849,827
                      500,001            -      1,000,000         1,768     0.39%    447,151     1,311,085,703       4.52%       8,293,935,530
                      1,000,001          -      5,000,000         1,246     0.28%    448,397     2,695,082,279       9.30%      10,989,017,809
                      5,000,001          -      10,000,000          195     0.04%    448,592     1,468,029,515       5.07%      12,457,047,324
                      10,000,001         -      50,000,000          214     0.05%    448,806     4,410,032,706      15.22%      16,867,080,030
                      50,000,001         -      99,999,999,999       61     0.02%    448,867    12,107,716,993      41.79%      28,974,797,023

                      Grand Total                               448,867    100.00%              28,974,797,023     100.00%


                      Substantial interest in shares:
                      No shareholder held more than 5% of the issued share capital of the Bank during the period.




26   Annual Report and Accounts December 2009
                                                                       Report of the Directors cont’d
                                                                                     For The Year Ended 31 December 2009




6.   DIRECTORS AND THEIR INTERESTS:
     1.   The names of the present Directors are listed in 6.3 below

     2.   Since the last Annual General Meeting, the following changes have taken place on the Board of Directors:
          Mr. Stanley Lawson and Alhaji Bashari Mohammed Gumel were appointed to the Board as Independent Directors.

          In accordance with Article 95(1)(a) of the Articles of Association of the Bank, the Directors retiring by rotation are
          Arc. Augustine W. U. Okam, Ichie Nnaeto Orazulike and Mr. Kayode Olowoniyi and being eligible, they offer
          themselves for re-election.

     3.   Directors' shareholdings:
          The Direct and Indirect interest of Directors in the issued share capital of the Company is as follows:

                                                                                        31 December                     30 June
                                                                                                2009                      2009
     NAME OF DIRECTOR                             DIRECT              INDIRECT                TOTAL
     Chief Christopher I. Ezeh                 45,650,083                    NIL           45,650,083               35,500,508
     Mallam Umar Yahaya                         1,073,575                    NIL            1,073,575                1,073,575
     Chief Nnamdi Oji                             305,400            83,277,680            83,583,080               83,583,080
     Mrs Bessie N. Ejeckam                      3,069,996           133,165,409           136,235,405              136,235,405
     Dim Elias E. Nwosu                                NIL          653,704,655           653,704,655              653,704,655
     Arc. Augustine W. U. Okam                316,010,714                    NIL          316,010,714                      N/A
     Ichie Nnaeto Orazulike                     1,665,300             1,665,300             3,330,600                      N/A
     Mr Kayode Olowoniyi                           50,000                    NIL               50,000                      N/A
     Mr Stanley Lawson                                 NIL                   NIL                   NIL                     N/A
     Alhaji Bashari M. Gumel                      101,666                    NIL              101,666                      N/A
     Mr Reginald Ihejiahi                      87,617,709                    NIL           87,617,709               87,617,709
     Mr Willie M. Obiano                       59,473,609                    NIL           59,473,609               59,473,609
     Mr Abdulrahman Esene                          96,820                    NIL               96,820                3,005,738
     Mr Ik. Mbagwu                              1,925,000                    NIL            1,925,000                1,925,000
     Mrs Onome Olaolu                              82,046                    NIL               82,046                      N/A

     4.   Directors interest in Contracts:
          Directors interest in contracts and related party transactions are detailed in Note 30.

7.   POST BALANCE SHEET EVENTS
     There are no significant post balance sheet events which could have had a material effect on the state of affairs of the
     Bank as at 31 December, 2009 and on the profit for the period ended on that date, which have not been adequately
     provided for or disclosed.

8.   PROPERTY AND EQUIPMENT
     Information relating to property and equipment is given in Note 21 to the financial statements. In the Directors opinion,
     the market value of the Group's properties is not less than the value shown in the financial statements.

9.   DONATIONS & CHARITABLE CONTRIBUTIONS
     Donations and gifts to charitable organisations during the year amounted to N8,963,552 (June 2009 - N11,457,200.00).
     There were no donations to political organisations during the period. The beneficiaries are:




                                                                                              Annual Report and Accounts December2009   27
               Report of the Directors cont’d
               For The Year Ended 31 December 2009




               Nigeria Drug Law Enforcement Agency - Anti-Drug Day                                                                     200,000
               Institute of Chartered Accountants of Nigeria - 2009 Annual Accountants’ Conference                                   5,100,000
               Cathederal Church of Christ, Marina - Lagos                                                                             100,000
               Federal Neuro-psychiatric Hospital, Yaba - Lagos                                                                      1,373,552
               Chartered Institute of Bankers - 3rd Annual Banking Conference                                                        1,500,000
               National Youth Service Corp - Wuse Abuja                                                                                355,000
               323 Artilery Regiment - Nigerian Army, Akure                                                                            300,000
               Police Community Relations Committee - Port Harcourt                                                                     35,000

               Total                                                                                                                 8,963,552


               10. EMPLOYMENT & EMPLOYEES
                       Employment of disabled persons
                       It is the policy of the Bank to ensure that there is no discrimination in considering applications for employment including
                       those from physically challenged persons. The policy ensures that disadvantaged persons are afforded, as far as is
                       practicable, identical opportunities with other employees. There was no such physically challenged person employed
                       during the year.

                       Health, Safety and Welfare of Employees
                       The Bank accords high priority to the health, safety and welfare of its employees both in and outside their place of work.
                       In furtherance of this, the Bank has a group life insurance policy and group personal accident policy to adequately insure
                       and protect its employees.

                       In addition, the Bank subscribes to a group health insurance scheme that provides a wide range of qualitative medical
                       services to all staff. Through this scheme, staff have access to a fully integrated health care delivery system, with
                       primary, secondary and tertiary healthcare services.

                       Employee involvement and training
                       The Bank is committed to keeping employees as fully informed as possible regarding the institution's performance and
                       progress. Opinions and suggestions of members of staff are sought and considered not only on matters affecting them
                       as employees but also on the general business of the Bank.

                       Sound management and professional expertise are considered to be the Bank's major assets, and investment in their
                       future development continues to be a top priority. Each employee has a documented training and career development
                       programme. To this end, short and long term training programmes are tailored to suit the requirements of both employees
                       and the Bank. Employees are adequately rewarded and motivated to achieve results.

               11. AUDITORS
                       The Joint Auditors, Messrs Akintola Williams Deloitte and Messrs PKF-Pannell Kerr Forster have indicated their willingness
                       to continue in office as the Bank's auditors in accordance with Section 357 (2) of the Companies and Allied Matters Act,
                       CAP C20 LFN 2004. A resolution will be proposed at the Annual General Meeting to authorise the Directors to
                       determine their remuneration.

               BY ORDER OF THE BOARD




               CHIJIOKE UGOCHUKWU (MRS)
               Company Secretary

               LAGOS, NIGERIA
               June 14, 2010




28   Annual Report and Accounts December 2009
               Corporate Governance Report
               INTRODUCTION
               Fidelity Bank Plc (Fidelity) remains committed to achieving and maintaining best practices in corporate governance by
               ensuring accountability of specific individuals, through mechanisms that reduce or eliminate procedural breaches.

               The Bank continues to comply with its internal governance policies and the Central Bank of Nigeria's (CBN) formal Code of
               Corporate Governance for Banks and other financial institutions in Nigeria. The CBN's Code of Corporate Governance is very
               detailed and covers a wide range of issues, including organisational structure, quality of Board membership, Board Performance
               Appraisal, Reporting Relationship, Disclosure Requirements, Risk Management and Role of Auditors.

               Fidelity undertakes an internal monthly assessment of compliance with the CBN Code and submits a monthly Corporate
               Governance Compliance Report to the CBN on matters specified in the Code.

               As a public quoted company, Fidelity also complies with the Code of Corporate Governance for Public Companies in Nigeria
               issued by the Securities & Exchange Commission and the Nigerian Stock Exchange.

               At Fidelity, all Board Members are members of the Institute of Directors of Nigeria (IOD) and the Bank Directors Association of
               Nigeria (BDAN), two non profit organisations dedicated to promoting best corporate governance practices and the highest
               ethical standards for Nigerian Companies/Banks.

               The Directors also participate in various training programmes and periodic Board Retreats aimed at improving the effectiveness
               of the Board.

               KEY GOVERNANCE DEVELOPMENTS
               Major governance developments during the period under review include appointment of two Independent Directors.

               CORPORATE GOVERNANCE FRAMEWORK:
               Fidelity's governance philosophy is hinged on its internal governance framework, which is executed through the following
               primary organs:

               (a)    The Board of Directors
               (b)    Board Committees
               (c)    Shareholders Audit Committee
               (d)    Management Committees

               THE BOARD OF DIRECTORS

               The Board (Structure and Responsibilities):
               Fidelity continues to operate a unitary board system in which the Board has both Supervisory and Management functions.
               These functions are split between the Executive Board, which comprises five (5) Executive Directors and the Supervisory or
               Full Board, which comprises fifteen (15) Directors (i.e. the five Executive Directors and ten Non Executive Directors).

               The Executive Board is the key management organ of the Bank and is primarily responsible for achieving its corporate
               operating and strategic performance expectations and increasing shareholder value. The Executive Board reports regularly to
               the Supervisory Board on all issues that relate to the growth and development of the Bank. The Supervisory Board plays a
               major supportive and complementary role in ensuring that the Bank is well managed. The Supervisory Board includes two (2)
               Independent Directors.

               The Board of Directors of Fidelity Bank, which is at the apex of the company's governance structure, is accountable to all
               stakeholders and plays a key role in corporate governance. It is the responsibility of the Board of Directors to endorse the
               Bank's organisational strategy, develop directional policy, appoint, supervise and remunerate senior executives and ensure
               accountability of the Bank to its owners, stakeholders and the regulatory authorities.

               The Board is also responsible for providing stable and effective leadership for the Bank, to facilitate achievement of its
               corporate operating objectives and performance expectations of investors.




30   Annual Report and Accounts December 2009
                                                         Corporate Governance Report cont’d


All Directors are persons of high integrity, who are competent, knowledgeable and proficient in their professional career,
business and or vocation. The professional background of Board members reflect these ideals. The Directors bring to the
Board, their diverse experience in several fields ranging from business, corporate finance, accounting, management,
banking operations, taxation, project finance, leasing and treasury management.

Chairman and Chief Executive
The positions, functions and responsibilities of the Chairman and Managing Director continue to remain separate. Whilst
the Chairman is responsible for leadership and overall Board effectiveness, the Managing Director/Chief Executive (MD/
CE) is responsible for the day to day management of the enterprise and its overall performance.

Board Meetings:
Membership and Attendance at Board Meetings during the period under review is as follows:

Name                                       Designation               Meeting Dates             Number of
                                                                     (6 meetings)              Meetings Attended
Chief Christopher I. Ezeh                  Chairman                  23 July, 2009                    6
Mallam Umar Yahaya                         Non Executive             25 August, 2009                  4
Chief Nnamdi Oji                           Non Executive             13 October, 2009                 6
Mrs Bessie N. Ejeckam                      Non Executive             29 October, 2009                 2
Chief Elias E. Nwosu                       Non Executive             21 December, 2009                5
Arc. Augustine W. U. Okam                  Non Executive             28 December, 2009                4
Ichie Nnaeto Orazulike                     Non Executive                                              6
Mr Kayode Olowoniyi                        Non Executive                                              6
*Mr. Stanley Lawson (appointed with
effect from 15 February, 2010)             Independent Director                                          -
*Alhaji Bashari Mohammed Gumel
(appointed with effect from
15 February, 2010)                         Independent Director                                          -
Mr Reginald Ihejiahi                       Executive                                                     5
Mr Willie M. Obiano                        Executive                                                     4
Mr Abdulrahman Esene                       Executive                                                     5
Mr Ik. Mbagwu                              Executive                                                     6
Mrs Onome Olaolu                           Executive                                                     3

* Board appointment was after the period under review.

BOARD COMMITTEES
The Board's functions are further dispensed through the six Board Committees indicated below, which work closely with
the Executive Board to achieve their objectives.

1.   Board Credit Committee:
     This Committee functions as a Standing Committee of the Board with responsibility for Credit Management.

     The Committee comprises of four (4) Non Executive Directors, the Executive Director, Risk Management and the
     Managing Director & Chief Executive. Its terms of reference include:

     Exercising all board assigned responsibilities on Credit related issues.
     Review and recommend to the full Board, Credit Policy changes.
     Ensure compliance with regulatory requirements on credits.
     Approving credits above the Management credit approval limits.
     Tracking the quality of the Bank's loan portfolio through quarterly review of risk assets.
     Receive and consider recommendations from the Management Credit & Investment Committee (MCIC), Asset &
     Liability Committee (ALCO), and Operational Risk Review Committee on matters relating to Credit Management.
     Consider and recommend for full Board approval, any Director, Shareholder and Insider related credits.
     Consider exceptions to rules or policies and counsel on unusual credit transactions.




                                                                                           Annual Report and Accounts December2009   31
               Corporate Governance Report cont’d


                 The Committee meets monthly or as the need arises. Membership and Attendance at meetings during the period under
                 review are as follows:

                 Name                                      Designation              Meeting Dates             Number of
                                                                                    (8 meetings)              Meetings Attended
                 Chief Elias E. Nwosu (Chairman)           Non Executive            22 July, 2009                    7
                 Mallam Umar Yahaya                        Non Executive            28 July, 2009                    8
                 Chief Nnamdi Oji                          Non Executive            26 August, 2009                  8
                 Ichie Nnaeto Orazulike                    Non Executive            30 September, 2009               7
                 Mr. Reginald Ihejiahi                     Managing Director &      28 October, 2009
                                                           Chief Executive          25 November, 2009                  2
                 Mrs. Onome Olaolu                         Executive Director, Risk 15 December, 2009                  5
                                                                                    28 December, 2009



                 2.    Board Risk Committee:
                       This Committee functions as a Standing Committee of the Board with responsibility for Enterprise Risk Management.

                       The Committee comprises of three (3) Non Executive Directors, the Executive Director, Risk Management and the
                       Managing Director & Chief Executive. Its terms of reference include:

                       Exercising all Board assigned responsibilities on Risk related issues.
                       Ensuring compliance with the Bank's Enterprise Risk Policies including Credit Risk, Market Risk and Operational Risk
                       Policies.
                       Ensure compliance with regulatory risk requirements.

                       The Committee meets quarterly or as the need arises. Membership and Attendance at meetings during the period under
                       review are as follows:

                 Name                              Designation                Meeting Dates                   Number of
                                                                              (3 Meetings)                    Meetings Attended
                 Chief Nnamdi Oji (Chairman)       Non Executive              20 July, 2009                          3
                 Arc. Augustine W. U. Okam         Non Executive              28 July, 2009                          3
                                                                              (Joint Credit/Risk Meeting)
                 Mr. Kayode Olowoniyi              Non Executive              26 October, 2009                         3
                 Mr. Reginald Ihejiahi             Managing Director &
                                                   Chief Executive                                                     3
                 Mrs. Onome Olaolu                 Executive Director, Risk                                            3

                 3.    Board Audit Committee:
                       The Board Audit Committee is comprised of four (4) Non-Executive Directors. The Committee's terms of reference
                       include:

                       Reviewing internal and external audit reports periodically.
                       Periodically review and recommend for full Board approval accounting, operations and procedural policies and controls
                       for the Bank.
                       Evaluating the performance and effectiveness of the Bank's External Auditors and make recommendations to the full
                       Board as to their retention or change.
                       Reviewing major expense lines periodically.
                       Reviewing the Bank's accounts before presentation and/or publication in all instances.




32   Annual Report and Accounts December 2009
                                                    Corporate Governance Report cont’d


The Committee meets quarterly or as the need arises. Membership and Attendance at meetings during the period under
review are as follows:

Name                                     Designation               Meeting Dates            Number of
                                                                   (2 Meetings)             Meetings Attended
Mrs. Bessie N. Ejeckam (Chairperson)     Non Executive             20 July, 2009                   -
Arc. Augustine W. U. Okam                Non Executive             26 October, 2009                2
Chief Nnamdi I. Oji                      Non Executive                                             2
Mr. Kayode Olowoniyi                     Non Executive                                             2

4.   Board Standing Committee:
     The Board Standing Committee comprises of four (4) Non-Executive Directors and its terms of reference include
     consideration of:

     Major issues that are neither credit nor audit related.
     Issues related to Senior Management (Manager and above) including Executive Directors ("EDs") and the Managing
     Director ("MD"), Human Resource Management including recruitment, reassignments, promotions and deployment.
     Major expenditure approvals in excess of Management's approval limits.
     Serious disciplinary cases involving Senior Management.

     The Committee meets quarterly or as the need arises. Membership and Attendance at meetings during the period
     under review are as follows:

Name                                              Designation   Meeting Dates               Number of
                                                                (2 Meetings)                Meetings Attended
Arc. Augustine W. U. Okam (Chairman)              Non Executive 21 July, 2009                      2
Mrs. Bessie N. Ejeckam                            Non Executive 27 October, 2009                   -
Chief Elias E. Nwosu                              Non Executive                                    2
Ichie Nnaeto Orazulike                            Non Executive                                    1

5.   Board Remuneration Committee:
     The Board Remuneration Committee comprises of three (3) Non-Executive Directors. Its terms of reference include
     consideration of all issues related to Executive Management compensation.

     The Committee meets quarterly or as the need arises. Membership and Attendance at meetings during the period
     under review are follows:

Name                                              Designation   Meeting Dates               Number of
                                                                (2 Meetings)                Meetings Attended
Mallam Umar Yahaya (Chairman)                     Non Executive 21 July, 2009                      1
Mrs Bessie N. Ejeckam                             Non Executive 9 September, 2009                  1
Ichie Nnaeto Orazulike                            Non Executive                                    2

6.   Board Corporate Strategy & Business Development Committee:
     This Committee comprises four (4) Non Executive Directors and its terms of reference include:

     Harnessing the Board's contacts and resources for expanding the Bank's business.
     Regularly reviewing the business development strategy of the Bank and its execution.
     Evaluating significant developments in the global economy and how they impact on the Bank.
     Reviewing and advising on major investment proposals by Management.




                                                                                       Annual Report and Accounts December2009   33
               Corporate Governance Report cont’d


                  The Committee meets quarterly or as the need arises. Membership and Attendance at meetings during the period under
                  review are as follows:

                  Name                                         Designation               Meeting Dates             Number of
                                                                                         (5 Meetings)              Meetings Attended
                  Mallam Umar Yahaya (Chairman)                Non Executive             22 July, 2009                    4
                  Chief Elias E. Nwosu                         Non Executive             26 August 2009                   5
                  Ichie Nnaeto Orazulike                       Non Executive              7 September, 2009               5
                  Mr. Kayode Olowoniyi                         Non Executive             28 October, 2009                 5
                                                                                         15 December, 2009

                  SHAREHOLDERS AUDIT COMMITTEE
                  This Committee is established in compliance with Section 359 (3) of the Companies & Allied Matters Act, CAP C20 LFN
                  2004. The Committee has six (6) members and membership is split evenly between three (3) members of the Board Audit
                  Committee and three (3) members nominated annually by shareholders at the Annual General Meeting.

                  The Shareholders Audit Committee reviews and approves the Bank's financial statements before publication. The Committee
                  meets quarterly or as the need arises. Membership and Attendance at meetings during the period under review are as
                  follows:

                  Name                                                  Designation      Meeting Dates             Number of
                                                                                         (2 Meetings)              Meetings Attended
                  Chief Augustine F. Agorua, JP (Chairman)              Shareholder      1 July, 2009;                    2
                  Dr. Christian S. Nwinia                               Shareholder      17 November, 2009                2
                  *Mr. Chidi Agbapu (appointed with effect
                  from 21st December, 2009)                            Shareholder                                          -
                  Mrs. Bessie N. Ejeckam                               Non Executive                                        -
                  Chief Nnamdi I. Oji                                  Non Executive                                        2
                  Arc. Augustine W. U. Okam                            Non Executive                                        2

                  * Appointment was after the period under review.

                  MANAGEMENT COMMITTEES
                  In addition to the Board, Board Committees and the Shareholders' Audit Committee, the Bank's corporate governance
                  objectives are also met through the following Management Committees:

                  1.     Executive Committee:
                         This Committee is comprised of the Managing Director & Chief Executive Officer and the Executive Directors of the
                         Bank. The Committee meets fortnightly or as required to consider the following key objectives:

                         Determine the strategic planning objectives of the Bank.
                         Review the business plan and ensure that same is in keeping with objectives.
                         Review the Human Resource and Audit Policy of the Bank.
                         Review all decisions that affect the management of the Bank and its staff.

                  2.     Asset & Liability Committee:
                         Membership of the Asset & Liability Committee is derived mainly from the asset and liability generation divisions of the
                         Bank. The Committee meets fortnightly or as required and has the following key objectives:

                         Review the economic outlook and its impact on the Bank's strategy.
                         Ensure adequate liquidity.
                         Ensure that Management interest rate risks are within acceptable parameters.
                         Maintain and enhance the capital position of the Bank.
                         Maximize the risk adjusted returns to stakeholders over the long term.



34   Annual Report and Accounts December 2009
                                                      Corporate Governance Report cont’d


3.   Management Credit & Investment Committee:
     The Management Credit & Investment Committee is charged with the following key responsibilities amongst others:

     Review of the Bank's Credit Policy Manual.
     Establishing Minimum Lending Rate (MLR).
     Establishing the Prime Lending Rate (PLR).
     Approving Target Market Definitions (TMD)
     Approving Risk Asset Acceptance Criteria (RAAC).
     Approving New Credit Products & Initiatives.
     Approving Individual Lending Limits subject to confirmation from Executive Director, Risk Management.
     Pre-approval of Platform Credits (Product papers).
     Approving Risk Rating.
     Approving Inter-Bank and Discount House Placement Limits.
     Approving Exposures up to maximum of N200 Million
     Approving Credit Portfolio Structures and Market Development.

4.   Credit Review Committee:
     The Credit Review Committee is charged with the following:

     Review of the Bank's credit risk portfolio.
     Review of collateral documentation to ensure compliance with approvals.
     Review of non-performing loan stock.
     Approving recovery strategies for bad loans.
     Approving portfolio classification/reclassification and level of provisioning.
     Approving interest waivers and loan write offs.

5.   Management Profitability Report Committee:
     This Committee meets monthly and is concerned primarily with reviewing the Bank's performance on set targets. It’s
     reponsibilities include:

     Review of the Bank's performance monthly.
     Monitor budget achievement.
     Assess efficiency of resource deployment in the Bank.
     Review product performance.
     Reappraise cost management initiatives.

6.   Operational Risk Committee:
     This Committee is charged with the following responsibilities:

     Ensuring full implementation of the Operational Risk Management framework approved by the Board Risk Committee
     and the Board of Directors within all Business and Support Units.
     Monitoring the implementation of policies, processes and procedures for managing operational risk in all of the Bank’s
     material products, activities, processes and systems.
     Ensuring that clear roles and responsibilities for the management of operational risk are defined throughout all leves
     of the Bank, including all Business and Support Units.
     Providing support to the Executive Director, Risk Management to ensure that a culture of compliance is entrenched
     throughout the Bank.

7.   Loan Recovery Committee:
     The Loan Recovery Committee is charged with the following key objectives:

     Review performance of Loan Recovery Agents, Receiver/Managers and Legal Firms assigned recovery briefs with the
     objective of delisting non-performers.
     Consider and recommend collateral realization on defaulting accounts .
     Consider and determine waivers, concessions and propose amounts to be accepted in full and final settlement by
     defaulting borrowers.
     Approve interest suspension and/or non-accrual for non-performing accounts on a case-by-case basis.




                                                                                         Annual Report and Accounts December2009   35
               Corporate Governance Report cont’d


               GENERAL
               Except for the Board Credit Committee, which meets monthly, all other Board and Board Committee meetings are held
               quarterly or as the need arise. The Chairman is not a member of any Board Committee. Each Board Committee Chairman
               presents a formal report on their Committees deliberations at Board meetings.

               With the exception of the Executive Committee, Assets & Liability Committee, Operational Risk Committee and Management
               Profitability Report Committee, which the Managing Director & Chief Executive Officer chairs, all other Management Committees
               meetings are presided over by Executive Directors.

               Management Committee Meetings are held fortnightly or monthly per the terms of reference of each Committee or as the
               need arises.

               In addition to the above, Fidelity is conscious of regulatory reporting requirements and routinely discloses any material
               information to all stakeholders. To this end, the Bank has developed firm structures for information dissemination via direct
               communication to interested parties using electronic and print media and its website.

               The Bank diligently submits its financial reports quarterly, half yearly and annually to the Nigerian Stock Exchange for
               publication following approval by the CBN.

               DIRECTORS' RESPONSIBILITIES FOR ANNUAL FINANCIAL STATEMENTS
               The Directors are responsible for the preparation of financial statements which give a true and fair view of the state of affairs
               of the Bank at the end of the period, and of the profit or loss for that period, and which comply with the provisions of the
               Companies and Allied Matters Act, CAP C20 LFN 2004 and the Banks and Other Financial Institutions Act, CAP B3 LFN 2004.

               In so doing they do ensure that:

               -      proper accounting records are maintained;
               -      internal control procedures are instituted which, as far as is reasonably possible, safeguard the assets and prevent and
                      detect fraud and other irregularities;
               -      applicable accounting standards are followed;
               -      suitable accounting policies are adopted and consistently applied;
               -      judgements and estimates made are reasonable and prudent; and
               -      the going concern basis is used, unless it is inappropriate to presume that the company will continue in business.

               The Directors accept responsibility for the annual financial statements, which have been prepared using appropriate accounting
               policies supported by reasonable and prudent judgements and estimates in conformity with:

               -      Nigerian Accounting Standards Board.
               -      Prudential Guidelines for Licensed Banks.
               -      Relevant Circulars issued by the Central Bank of Nigeria.
               -      Requirements of the Banks and Other Financial Institutions Act.
               -      Requirements of the Companies and Allied Matters Act.

               The Directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of
               the Bank and Group and of the profit for the period. The Directors further accept responsibility for the maintenance of
               accounting records that may be relied upon in preparation of the financial statements, as well as adequate systems of internal
               control.

               Nothing has come to the attention of the Directors to indicate that the Bank will not remain a going concern for at least
               twelve months from the date of this Statement.




                _______________________________                                         _____________________________
                             Director                                                               Director




36   Annual Report and Accounts December 2009
                                                 Audit Committee’s Report
                                                                                            To the members of Fidelity Bank Plc




In compliance with Section 359 (6) of the Companies and Allied Matters Act Cap C20 LFN 2004, we:

i)     Reviewed the scope and planning of the audit requirements and found them adequate.

ii)    Reviewed the financial statements for the year ended 31 December 2009 and are satisfied with the explanations
       obtained.

iii)   Reviewed the External Auditors Management Report for the year ended 31 December 2009 and are satisfied that
       Management is taking appropriate steps to address the issues raised.

iv)    Reviewed all insider related credits as defined in Section 20 (5) of Banks and Other Financial Institutions Act, Cap B3 LFN
       2004. Our review confirmed that the bank disclosed all such credits and they were reported in line with the CBN's
       prescribed format.

v)     Ascertained that the accounting and reporting policies of the company for the year ended 31 December 2009 are in
       accordance with legal requirements and agreed ethical practices.

The External Auditors confirmed having received full cooperation from the company's management and that the scope of
their work was not restricted in any way.




Chairman, Audit Committee
May 4, 2010



Members of the Audit Committee are:

1.     Chief Augustine F. Agorua, JP         -        Chairman
2.     Dr. Christian Nwinia                  -        Member
3.     Mrs. Bessie N. Ejeckam                -        Member
4.     Chief Nnamdi I. Oji                   -        Member
5.     Arc. Augustine W. U. Okam             -        Member
6.     Mr. Chidi Agbapu                      -        Member




                                                                                                Annual Report and Accounts December2009   37
               Report of the External Consultants on
               the Board Appraisal




               We conducted the appraisal of the Board of Directors (“the Board”) of Fidelity Bank Plc (“the Bank”) for the six - month
               period ended 31 December, 2009 in accordance with the standards set by the Central Bank of Nigeria (CBN) Code of Corporate
               Governance for Banks in Nigeria Post Consolidation (“the CBN Code”). Corporate governance is the system by which business
               corporations are directed and controlled to enhance performance and long-term shareholder value.

               We reviewed the Bank’s corporate governance report included on pages 28 to 34 of the Annual Report for the six - month
               period ended 31 December 2009, as prepared by the Board, and assessed the level of compliance of the Board with the CBN
               Code.

               The principal recommendations from our appraisal of the Board of the Bank, in accordance with the CBN Code, were in the
               following areas: composition of the Board Committees, tenure of Non-executive Directors, and the appointment of independent
               Non-executive Directors. However, subsequent to 31 December 2009, the Board and the CBN approved the appointment of
               two (2) independent Non-executive Directors subject to their re-election by the shareholders.




               Partner, KPMG Professional Services
               21 June 2010




38   Annual Report and Accounts December 2009
Akintola Williams Deloitte                                                                                                     Pannell Kerr Forster
(Chartered Accountants)                                                                                                        Chartered Accountants
235 Ikorodu Road, Ilupeju
P. O. Box 965, Marina                                                                                                          Toloye House
Lagos, Nigeria                                                                                                                 362, Ikorodu Road/1A Okupe Estate,
                                                                                                                               Maryland,
Tel: +234 1 2717800                                                                                                            G.P.O. Box 2047 Marina,
Fax: +234 1 2717801                                                                                                            Lagos, Nigeria
www.deloitte.com
                                                                                                                               Tel: +234 1 8042074, 7748366
                                                                                                                               Fax: +234 1 7734940
                                                                                                                               E-mail: pkfnig@hyperia.com




       Report of the Independent Joint Auditors
       To the Members of Fidelity Bank Plc


       Report on the Financial Statements
       We have audited the accompanying financial statements of Fidelity Bank Plc and its subsidiary companies (the Group), set out
       on pages 44 to 90, which comprise the balance sheet as at 31 December 2009, the income statement, statement of cash
       flows, statement of value added for the period then ended, summary of significant accounting policies, financial summary and
       other explanatory information.

       Directors' Responsibility for the Financial Statements
       The Directors are responsible for the preparation and fair presentation of these financial statements in accordance with the
       Companies and Allied Matters Act, CAP C20, LFN 2004, and the Banks and Other Financial Institutions Act, CAP B3, LFN
       2004, and for such internal control as the Directors determine are necessary to enable the preparation of financial statements
       that are free from material misstatement, whether due to fraud or error.

       Auditors' Responsibility
       Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
       accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and
       plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material
       misstatement.

       An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
       statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material
       misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors
       consider internal controls relevant to the entity's preparation and fair presentation of the financial statements in order to
       design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
       effectiveness of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting policies
       used and the reasonableness of accounting estimates made by Directors, as well as evaluating the overall presentation of the
       financial statements.

       We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

       Opinion
       In our opinion, the financial statements present fairly, in all material respects, the financial position of the Group and the Bank
       as at 31 December 2009, and of its financial performance and its cash flows for the period then ended; the Group and the
       Bank have kept proper books of account, which are in agreement with the balance sheet and income statement, in the
       manner required by the Companies and Allied Matters Act, CAP C20, LFN 2004, and the Banks and Other Financial
       Institutions Act, CAP B3, LFN 2004, in accordance with the Statement of Accounting Standards issued by the Nigerian
       Accounting Standards Board.

       Report on Compliance with Banking Regulations
       We confirm that our examination of loans and advances was carried out in accordance with the Prudential Guidelines for
       licensed banks issued by the Central Bank of Nigeria.

       In accordance with circular BSD/1/2004 issued by the Central Bank of Nigeria, details of insider related credits are as disclosed
       in note 30.

       Contraventions
       No contravention of the provision of the Banks and Other Financial Institutions Act, CAP B3, LFN 2004 was brought to our
       attention during the audit of the financial statements for the period ended 31 December 2009.




       Chartered Accountants                                                                             Chartered Accountants
       Lagos, Nigeria                                                                                    Lagos, Nigeria
       22 April 2010                                                                                     22 April 2010




                                                                                                       Annual Report and Accounts December2009         39
               Statement of Accounting Policies
               The principal accounting policies adopted in the preparation of these financial statements are set out below:

               a) Basis of preparation
                      These financial statements are the consolidated financial statements of Fidelity Bank Plc, a company incorporated in
                      Nigeria on 19 November, 1987 and its subsidiaries (hereinafter collectively referred to as "the Group"). The financial
                      statements are prepared under the historical cost convention modified by the revaluation of certain investment securities,
                      property, plant and equipment, and comply with the Statement of Accounting Standards issued by the Nigerian
                      Accounting Standards Board.

                      The preparation of financial statements in conformity with generally accepted accounting principles requires the use of
                      estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
                      and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
                      reporting period. Although these estimates are based on the directors' best knowledge of current events and actions,
                      actual results ultimately may differ from those estimates.

               b) Consolidation
                      Subsidiary undertakings, which are those companies in which the Bank, directly or indirectly, has an interest of more
                      than half of the voting rights or otherwise has power to exercise control over their operations, have been consolidated.
                      Where necessary, accounting policies for subsidiaries have been changed to ensure consistency with the policies
                      adopted by the Bank. Separate disclosure is made for minority interest.

                      The acquisition method is used to account for business combinations. The cost of an acquisition is measured as the
                      market value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange,
                      plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities
                      assumed in a business combination are measured initially at their market values at acquisition date, irrespective of the
                      extent of any minority interest. The excess of the cost of acquisition over the value of the Group's share of the
                      identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the value of the net assets
                      of the subsidiary acquired, the difference is recognised directly in the profit and loss account.

                      Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated.
                      Unrealised losses are also eliminated unless the transaction provides evidence of impairment of the asset transferred.

               c)     Segment reporting
                      A business segment is a group of assets and operations engaged in providing products or services that are subject to risks
                      and returns that are different from those of other business segments. A geographical segment is engaged in providing
                      products or services within a particular economic environment that are subject to risks and returns different from those
                      of segments operating in other economic environments.

                      Segment information is presented in respect of the bank's and group's business segments. The business segments are
                      determined by management based on the Company's internal reporting structure.

                      Segment results, assets and liabilities include items directly attributable to segment as well as those that can be allocated
                      on a reasonable basis.

               d) Foreign currency translation

               i.     Reporting currency
                      The consolidated financial statements are presented in Nigerian Naira, which is the Bank's reporting currency.

               ii.    Transactions and balances
                      Foreign currency transactions are translated into the reporting currency using the exchange rates prevailing at the dates
                      of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
                      translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised
                      in the profit and loss account.

               e) Recognition of income

               (i)    Interest Income and Interest Expense
                      Interest income including interest earned on investment securities are recognised on an accrual basis for all interest bearing
                      instruments, except for interest overdue by more than 90 days, which is suspended and recognised only to the extent
                      of cash received.




40   Annual Report and Accounts December 2009
                              Statement of Significant Accounting Policies cont’d


(ii) Fees, Commission and Other Income
      Fees and commissions, where material are amortised over the life of the related service. Otherwise fees, commissions and
      other income are recognised as earned upon completion of the related service.

(iii) Lease Finance Income
      Income from advances under finance leases is recognised on a basis that provides a constant yield on the outstanding
      principal over the lease term.

(iv) Dividend Income
      Dividends are recognised in the income statement when the entity's right to receive payment is established.

f)    Provision against credit risk
      Provision is made in accordance with the Prudential Guidelines for Licensed Banks issued by the Central Bank of Nigeria
      for each account that is not performing in accordance with the terms of the related facility as follows:.

      Interest and/or Principal outstanding for over:                          Classification:             Provision:
      90 days but less than 180 days                                           Substandard                 10%
      180 days but less than 360 days                                          Doubtful                    50%
      360 days and over                                                        Lost                        100%

      When a loan is deemed not collectible, it is written off against the related provision for impairments and subsequent
      recoveries are credited to the profit and loss account.

      In addition, a provision of 1% minimum is made for all performing accounts to recognize losses in respect of risks inherent
      in any credit portfolio. However, the 1% provision was not made in the current financial statements.

      Risk assets in respect of which a previous provision was not made are written directly to the profit and loss account
      when they are deemed to be not collectible.

g) Offsetting
      Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally
      enforceable right to set off the recognised amounts and there is an intention to settle on a net basis, or realise the asset
      and settle the liability simultaneously.

h) Investment securities
      The Group categorises its investment securities into the following categories: short term investments and long-term
      investments. Investment securities are initially recognized at cost and management determines the classification at initial
      investment.

i.    Short term investments
      Short-term investments are investments held temporarily in place of cash and which can be converted into cash when
      current financing needs make such conversion desirable. In addition, management intends to hold such investment for
      not more than one year.

      Short-term investments are subsequently re-measured at the lower of cost and market value (quoted bid prices). The
      amount by which cost exceeds market value (unrealized loss) is charged to the profit and loss account for the period.

ii.   Long term investments
      Long-term investments are investments held by management over a long period of time to earn income. Long-term
      investments may include debt and equity securities.

      Long-term investments are carried at revalued amounts. Gains and losses arising from changes in the market value of
      long-term investments are recognised in revaluation reserve. Decreases that offset previous increases of the same asset
      are charged against the revaluation reserve; all other decreases are charged to the profit and loss account

      Interest earned whilst holding investment securities is reported as interest income. Dividends receivable are included
      separately in dividend income when a dividend is declared. A change in market value of investment securities is not
      taken into account unless it is considered to be permanent.




                                                                                                Annual Report and Accounts December2009   41
               Statement of Significant Accounting Policies cont’d


               i)     Investments in subsidiaries
                      Investments in subsidiaries are carried in the company's balance sheet at cost less provisions for impairment losses. Where,
                      in the opinion of the Directors, there has been impairment in the value of an investment, the loss is recognised as an
                      expense in the period in which the impairment is identified.

                      On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or
                      credited to the profit and loss account.

               j)     Intangible assets
                      Intangible assets consist of computer software and the costs associated with development of software for internal use.
                      Costs that are directly associated with the production of identifiable and unique software products which are controlled
                      by the Company and which will probably generate economic benefits exceeding costs are recognized as intangible
                      assets. These costs are amortised on a straight line basis at the rate of 20%. Costs associated with maintaining software
                      programs are recognized as an expense when incurred.

               k)     Property and equipment
                      All property and equipment are initially recorded at cost. They are subsequently stated at historical cost less depreciation.
                      Historical cost includes expenditure that is directly attributable to the acquisition of the assets.

                      Subsequent costs are included in the asset's carrying amount or are recognised as a separate asset, as appropriate, only
                      when it is probable that future economic benefits associated with the asset will flow to the Group and the cost of the
                      asset can be measured reliably. All other repairs and maintenance are charged to the profit and loss account during the
                      financial period in which they are incurred.

                      Construction cost in respect of offices is carried at cost as work in progress. On completion of construction, the related
                      amounts are transferred to the appropriate category of property and equipment. Payments in advance for items of
                      property and equipment are included as Prepayments in Other Assets and upon delivery are reclassified as additions in the
                      appropriate category of property and equipment. No depreciation is charged until the assets are put into use.

                      Depreciation is calculated on a straight-line basis to write down the cost of property and equipment to their residual
                      values over their estimated useful lives as follows:

                      Motor vehicles                                 -        25%
                      Office equipment                               -        20%
                      Furniture and fittings                         -        20%
                      Computer hardware and equipment                -        20%
                      Computer software                              -        20%
                      Leasehold land & buildings                     -        Over the lease period
                      Leasehold improvement                          -        Over the unexpired lease term

                      Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances
                      indicate that the carrying amount may not be recoverable. An asset's carrying amount is written down immediately to
                      its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. The recoverable
                      amount is the higher of the asset's value less costs to sell and value in use.

                      Gains and losses on disposal are determined by comparing proceeds with carrying amount. These are included in the
                      profit and loss account for the year.

               l)     Leases
                      The Group classifies a lease as a finance lease if the following conditions are met:

               a)     lease is non-cancelable, and
               b)     any of the following is applicable:

               i.     the lease term covers substantially (80% or more) the estimated useful life of the asset or,
               ii.    the net present value of the lease at its inception using the minimum lease payments and the implicit interest rate is equal
                      to or greater than the fair value of the leased asset or,
               iii.   the lease has a purchase option which is likely to be exercised.

                      A lease that does not qualify as a finance lease as specified above is treated as an operating lease.

                      A Group company can be a lessor or a lessee in either a finance lease or an operating lease




42   Annual Report and Accounts December 2009
                              Statement of Significant Accounting Policies cont’d


     A Group company is the lessor
     When assets are held subject to a finance lease, the transactions are recognised in the books of the Group at the net
     investment in the lease. Net investment in the lease is the gross investment in the lease discounted at the interest rate
     implicit in the lease. The gross investment is the sum of the minimum lease payments plus any residual value payable on
     the lease. The discount on lease is defined as the difference between the gross investment and the present value of the
     asset under the lease.

     The discount is recognised as unearned in the books of the Group and amortised to income as they are earned over the
     life of the lease at a basis that reflects a constant rate of return on the Group's net investment in the lease.

     Finance leases are treated as risk assets and the net investment in the lease are subject to the provisioning policy listed
     in (f).

     When assets are held subject to an operating lease, the assets are recognised as property and equipment based on the
     nature of the asset and the Group's normal depreciation policy for that class of asset applies.

     Lease income is recognised on a straight line basis over the lease term. All initial direct costs associated with the operating
     lease are charged as incurred to the profit and loss account.

m) Cash and cash equivalents
     Cash comprises cash on hand and demand deposits denominated in Naira and to foreign currencies. Cash equivalents are
     short-term, highly liquid instruments, which are:

a)   readily convertible into cash, whether in local or foreign currency; and
b)   so near to their maturity dates as to present insignificant risk of changes in value as a result of changes in interest rates.

n) Provisions, contingent liabilities and contingent assets
     Provisions are liabilities that are uncertain in timing or amount.

     Provisions are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is
     more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been
     reliably estimated.

     Provisions are normally made for restructuring costs and legal claims. In addition, general provisions are made on
     performing risk assets balances in accordance with the Prudential Guidelines for Licensed Banks. Risk assets comprise of
     loans and advances, advances under finance leases, etc.

     A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by
     the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group
     or the Group has a present obligation as a result of past events but is not recognised because it is not likely that an
     outflow of resources will be required to settle the obligation or the amount cannot be reliably estimated.

     Contingent liabilities normally comprise of legal claims under arbitration or court process in respect of which a liability is
     not likely to eventuate.

     A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the
     occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group.

     A contingent asset is never recognised rather they are disclosed in the the financial statements when they arise.

o) Retirement benefits
     The Group has both defined benefit and defined contribution plans.

     A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on
     retirement, usually dependent on one or more factors, such as age, years of service and compensation.

     A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The
     Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets
     to pay all employees the benefits relating to employee service in the current and prior periods. For defined contribution
     plans, the Group makes contributions on behalf of qualifying employee to a mandatory scheme under the provisions of
     the Pension Reform Act of 2004. The Group has no further payment obligations once the contributions have been paid.
     The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised
     as an asset to the extent that a cash refund or a reduction in the future payments is available. Payments are made to
     Pension Fund Administration Companies who are appointed by respective staff of the group.



                                                                                                 Annual Report and Accounts December2009   43
               Statement of Significant Accounting Policies cont’d


               p) Taxation

               (i)    Income tax
                      Income tax payable on profits, based on the applicable tax law in each jurisdiction, is recognised as an expense in the
                      period in which the related profits arise. The tax effects of income tax losses available for carry forward are recognised
                      as an asset when it is probable that taxable profits will be available against which these losses can be utilised.

               (ii) Deferred tax
                      Deferred income tax is provided using the liability method for all timing differences arising between the tax bases of assets
                      and liabilities and their carrying values for financial reporting purposes. Currently enacted tax rates are used to determine
                      deferred income tax.

                      The principal timing differences arise from depreciation of property, plant and equipment, provisions for pensions and
                      other post-retirement benefits, provisions for loan losses and tax losses carried forward. The rates enacted or substantively
                      enacted at the balance sheet date are used to determine deferred income tax. However, the deferred income tax is not
                      accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination
                      that at the time of the transaction affects neither accounting nor taxable profit or loss.

                      Deferred tax assets are recognised where it is probable that future taxable profit will be available against which the timing
                      differences can be utilised.

               q) Ordinary Share capital

               i.     Share issue costs
                      Incremental costs directly attributable to the issue of new shares or to the acquisition of a business are shown in equity
                      as a deduction, net of tax, from the proceeds.

               ii.    Dividends on ordinary shares
                      Dividends on ordinary shares are appropriated from revenue reserve in the period they are approved by the Bank's
                      shareholders.

                      Dividends for the year that are approved by the shareholders after the balance sheet date are dealt with in the
                      subsequent events note

                      Dividends proposed by the Directors' but not yet approved by members are disclosed in the financial statements in
                      accordance with the requirements of the Company and Allied Matters Act 1990.

               r)     Off-balance sheet transactions
                      Contingent liabilities arising from guaranteed commercial papers, letters of credit (clean line), performance bonds and
                      guarantees issued on behalf of customers in the ordinary course of business are reported off-balance sheet in recognition
                      of the risk inherent in those transactions.

                      Income on these transactions is recognised as earned on issuance of the bond or guarantee.




44   Annual Report and Accounts December 2009
     Balance Sheet
     As At 31 December 2009




                                                                           The Group                                     The Bank
                                                        31 December                     30 June          31 December            30 June
                                                               2009                       2009                  2009              2009
                                                   Note    N’million                   N’million            N’million          N’million

     Assets
     Cash and balances with Central Bank              9         23,721                   24,895                23,720            24,894
     Treasury bills                                 10         164,092                  161,066               164,092           161,066
     Due from other banks                           11          28,434                   45,662                28,574            45,380
     Loans and advances to customers                12         160,297                  214,922               161,297           215,112
     Advances under finance lease                   15          15,101                   15,449                15,101            15,449
     Insurance receivables                          16              61                      195                    61               195
     Investment securities                          17          11,018                   11,258                 8,654             8,952
     Investment in subsidiaries                     18               -                        -                   815               986
     Other assets                                   20           7,977                    8,903                 7,108             8,604
     Intangible assets                               21            320                      384                   295               354
     Property and equipment                        21.1         24,645                   23,535                24,335            23,173

                                                               435,666                  506,267               434,052           504,164


     Liabilities
     Customer deposits                               22        288,096                  355,770               288,808           356,137
     Income tax payable                               8          1,565                    2,551                 1,491             2,488
     Other liabilities                               23         14,112                   17,615                13,115            15,541
     Deferred tax liabilities                        24              3                      336                     -               336
     Retirement benefit obligations                  25          1,298                      288                 1,298               288

                                                               305,074                  376,561               304,712           374,790


     Equity
     Ordinary share capital                          27         14,481                   14,481                14,481            14,481
     Share premium account                           27        101,272                  101,272               101,272           101,272
     Statutory reserve                               28          8,707                    8,283                 8,707             8,283
     Retained earnings                               28          3,552                    2,752                 2,249             2,707
     Reserve for small/medium
     scale industries                                28            764                      764                   764                  764
     Capital Reserve                                 28          1,915                    1,867                 1,867                1,867

     Total equity                                              130,691                  129,419               129,340           129,374
     Non-controlling interest                        26             (99)                    287                      -                   -

     Total equity and liabilities                              435,666                  506,267               434,052           504,164

     Acceptances and guarantees                      29        121,160                   59,043               121,160               59,043


     The accounting policies on pages 38 to 42 and the notes on pages 47 to 76 were approved by the Board of Directors on 22 April
     2010 and signed on its behalf by:




     Chairman                                                                                      Managing Director and CEO




46    Annual Report and Accounts December 2009
                                                Profit and Loss Account
                                                                             For The Period Ended 31 December 2009




                                                      The Group                                 The Bank
                                           6 months to      12 months to            6 months to      12 months to
                                          31 December            30 June           31 December            30 June
                                                 2009              2009                   2009              2009
                                     Note     N’million         N’million              N’million         N’million


Gross earnings                                  34,716            72,274                    33,894                     70,597

Interest and similar income               3      25,727            51,303                   25,513                     50,568
Interest and similar expense              4     (12,363)          (18,018)                 (12,403)                   (17,318)

Net interest income                            13,364            33,285                   13,110                      33,250

Fee and commission income                 5      4,017            10,295                     3,989                     10,242
Fee and commission expense                        (265)                -                      (265)                         -

Net fee and commission income                   3,752            10,295                     3,724                     10,242

Foreign exchange income                          3,227             7,075                     3,227                      7,075
Income from investments                   6        704               953                       354                        650
Other income                                     1,041             2,648                       811                      2,062

                                                 4,972            10,676                     4,392                      9,787


Operating income                               22,088            54,256                   21,226                      53,279
Operating expenses                         7   (16,158)          (26,964)                 (15,821)                    (25,968)
Diminution in asset values                14    (3,876)          (23,477)                  (3,525)                    (22,696)

Profit on ordinary activities
before taxation                                  2,054              3,815                    1,880                      4,614
Taxation                                  8       (497)            (2,385)                    (466)                    (2,317)

Profit after taxation                            1,557             1,430                     1,414                      2,297
Non-controlling interest                  26       191               403                         -                          -

Profit attributable to the shareholders         1,748             1,833                     1,414                      2,297


Appropriated as follows:
Statutory reserve                         28       424               689                        424                       689
Retained earnings reserve                 28     1,324             1,144                        990                     1,608

                                                 1,748             1,833                     1,414                      2,297

Earnings per share (basic)                33         6                 6                           5                        8




                                                                           Annual Report and Accounts December 2009       47
     Statement of Cash Flows
     For The Period Ended 31 December 2009




                                                                 The Group                            The Bank
                                                       6 months to      12 months to      6 months to      12 months to
                                                      31 December            30 June     31 December            30 June
                                                             2009              2009             2009              2009
                                                 Note     N’million         N’million        N’million         N’million

     OPERATING ACTIVITIES
     Cash used in operations                       32       (10,219)           (5,784)         (9,236)            (6,905)
     Tax paid                                       8         (1,816)          (2,298)         (1,798)            (2,144)

     Net cash used in operating activities                  (12,035)           (8,082)        (11,033)            (9,049)


     FINANCING ACTIVITIES
     Dividend paid to shareholders                 28        (1,448)           (8,689)         (1,448)            (8,689)
     Non controlling interest                      26           729              (147)              -                  -
     Capital reserve adjustment
     on rights issue                                             48                 -               -                  -
     Share issue expenses                                         -               (98)              -                (98)

     Net cash used in financing activities                     (671)           (8,934)         (1,448)            (8,787)


     INVESTING ACTIVITIES
     Purchase of investments                     17.1b         (184)           (1,922)              -                  -
     Purchase of investments in subsidiaries        18                              -               -             (1,134)
     Purchase of Long term Investments            17.2          (15)           (6,135)            (15)            (6,135)
     Redemption/Disposal of investments           17.2           30               290              30                  -
     Purchase of property, plant
     and equipment                                 21        (2,511)           (8,814)         (2,499)            (8,761)
     Proceeds from sale of property
     and equipment                                               11              192               11               182

     Net cash used in investing
     activities                                              (2,669)          (16,389)         (2,473)          (15,848)

     Decrease in cash and
     cash equivalents                                       (15,375)          (33,405)        (14,954)          (33,684)


     Analysis of changes in cash
     and cash equivalents
     At start of the period                                231,622           265,027          231,340           265,024
     At end of the period                          35      216,247           231,622          216,386           231,340

     Decrease in cash and
     cash equivalents                                       (15,375)          (33,405)        (14,954)          (33,684)




48    Annual Report and Accounts December 2009
                                 Notes to the Financial Statements
                                                                                              For The Period Ended 31 December 2009




1.   General information
     The Bank was incorporated as a private limited liability company on 19 November 1987. It obtained a merchant banking licence on
     31 December 1987 and commenced banking operations on 3 June 1988. The bank converted to a commercial bank on 16 July
     1999 and re-registered as a public limited company on 10 August 1999. The bank obtained its universal banking licence on 6
     Febuary 2001. The shares are quoted on the Nigerian Stock Exchange.


     Following the banking industry consolidation program announced in July 2004, Fidelity Bank Plc combined its business operations
     with former FSB International Bank Plc and former Manny Bank Plc with effect from 1 January 2006.


     The Bank has three subsidiaries as analysed below:
                                                                                    %
     Fidelity Securities Ltd                                                     54.43
     Fidelity Pension Managers Ltd                                                  61
     Fidelity Bureau De Change (yet to commence operations)                        100


2.   Segment analysis
     a)     By geographical segment
            The Group’s business was wholly carried out in Nigeria during the period under review.

            Transactions between the business segments are on normal commercial terms and conditions.

            Funds are ordinarily allocated between segments, resulting in funding cost transfers disclosed in operating income. Interest
            charged for these funds is based on the Group’s cost of capital. There are no other material items of income or expense
            between the business segments.

            Internal charges and transfer pricing adjustments have been reflected in the performance of each segment. Revenue sharing
            agreements are used to allocate external customer revenues to a segment on a reasonable basis.


                                                                                                   Nigeria
                                                                                               6 months to
                                                                                              31 December
                                                                                                     2009
                                                                                                   N’million
          At 31 December 2009
          Internal revenues                                                                           34,716
          Revenues from other segments                                                                        -


                                                                                                      34,716


          Operating profit                                                                            22,088


          Profit before tax                                                                             2,054
          Income tax expense                                                                             (497)


          Profit for the year                                                                           1,557




                                                                                            Annual Report and Accounts December 2009   49
     Notes to the Financial Statements cont’d
     For The Period Ended 31 December 2009




     2.   Segment analysis (contd.)
                                                                                                       Nigeria
                                                                                                   6 months to
                                                                                                  31 December
                                                                                                         2009
                                                                                                      N’million


              Total segment assets                                                                      435,666


              Total segment liabilities                                                                 435,666


              Other segment items
              Depreciation                                                                                1,328


              Amortisation                                                                                    64



     b)   By business segment
          Business segments are distinguishable components of the Group with services that is used by management for its internal reporting
          purpose. Each business segment operates with a degree of autonomy in pursuing its strategic goals, managing operations and
          ensuring accountability though in tandem with the Group's policies. Each of the business segments has its separate planning,
          administration and financial reporting system as an independent entity. Segment financial information is evaluated regularly by
          management so as to evaluate the performance and returns on the allocation of financial and other resources.


          The Group is divided into the following business units:


          -        Retail and Corporate Banking:
                   Offering a comprehensive range of Retail, personal, commercial and Corporate Banking services and products to
                   individuals, small business customers, Corporate, medium and large business customers.

              -    Investment and Capital Market Operations:
                   This provides Investment and Capital Market services to both individual and institutional investors.

              -    Pension funds management:
                   This provides individuals and financial institutions pension funds management and advisory services.




50    Annual Report and Accounts December 2009
                                                       Notes to the Financial Statements cont’d
                                                                                   For The Period Ended 31 December 2009


2.   Segment analysis (contd.)

                                         Retail &    Pension         Investment                                       Group
                                        Corporate      Fund            & Capital         Net Consol              6 months to
                                         Banking Management              Market          Adjustment             31 December
                                        N’million      N’million       N’million             N’million                N’million


     At 31 December 2009
     Internal revenues                    33,894             66             786                     (30)                   34,716
     Revenues from other segments              -              -               -                       -                         -

     Total                                33,894             66             786                     (30)                   34,716

     Operating profit/(loss)               21,226            (49)          (356)                 1,267                     22,088

     Profit/(loss) before tax               1,880           (49)           (356)                    579                     2,054
     Income tax expense                      (466)            -             (28)                      (3)                    (497)

     Profit for the year                    1,414            (49)          (384)                    576                     1,557


                                         Retail &    Investment         Pension                                       Group
                                        Corporate      & Capital          Fund           Net Consol              6 months to
                                         Banking         Market     Management           Adjustment             31 December
                                        N’million      N’million       N’million             N’million                N’million


     At 31 December 2009
     Total segment assets                434,052          5,308             391                 (4,085)                   435,666

     Total segment liabilities           434,052          5,308             391                 (4,085)                   435,666

     Other segment information
     Depreciation                           1,295            19              14                                             1,328

     Amortization                              59              -              5                                                64




                                                                                                                     Nigeria
                                                                                                                12 months to
                                                                                                                    30 June
                                                                                                                       2009
                                                                                                                      N’million

     At 30 June 2009
     a) By geographical segment
         Internal revenues                                                                                                 72,274
         Revenues from other segments                                                                                           -

                                                                                                                           72,274

          Operating profit                                                                                                 54,256
          Profit before tax                                                                                                 3,815

          Income tax expense                                                                                               (2,385)

          Profit for the year                                                                                               1,430




                                                                               Annual Report and Accounts December 2009      51
     Notes to the Financial Statements cont’d
     For The Period Ended 31 December 2009




          b)    By business segment (contd.)

                                                  Retail &       Investment          Pension
                                                 Corporate         & Capital           Fund       Net Consol
                                                  Banking            Market      Management       Adjustment             Total
                                                 N’million         N’million         N’million      N’million        N’million


                Internal revenues                    70,597           1,611                66                          72,274
                Revenues from other segments              -               -                 -                               -

                Total                                 70,597          1,611                66                          72,274

                Profit/(Loss) before tax                4,614         (3,071)            (226)         2,451             3,768
                Income tax expense                    (2,317)            (67)               -             46            (2,338)

                Profit for the year                    2,297          (3,138)            (226)         2,497             1,430

                Segment assets                       504,164          5,495               351          (3,743)        506,267

                Total segment assets                 504,164          5,495               351          (3,743)        506,267

                Segment liabilities                  504,164          5,495               351          (3,743)        506,267

                Total segment liabilities            504,164          5,495               351          (3,743)        506,267


                Other segment information
                Depreciation                           1,915             42                32                            1,989

                Amortization                             118               -                9                             127


                                                                          The Group                          The Bank
                                                                 6 months to     12 months to     6 months to     12 months to
                                                                31 December          30 June     31 December          30 June
                                                                       2009             2009            2009             2009
                                                                   N’million         N’million      N’million        N’million


     3.   Interest and similar income

          Bank sources
          Placements                                                  1,331               534          1,172               369
          Treasury bills and investment securities                    2,189             4,767          2,322             4,767

          Non-bank sources
          Loans and advances                                         20,837            43,920         20,649           43,350
          Advances under finance leases                               1,370             2,082          1,370            2,082

          Interest income earned in Nigeria                          25,727            51,303         25,513           50,568




52    Annual Report and Accounts December 2009
                                                          Notes to the Financial Statements cont’d
                                                                                        For The Period Ended 31 December 2009




                                                                The Group                               The Bank
                                                       6 months to     12 months to          6 months to     12 months to
                                                      31 December          30 June          31 December          30 June
                                                             2009             2009                 2009             2009
                                                         N’million         N’million              N’million                N’million


4.   Interest and similar expense
     Current accounts                                       7,127             5,240                   7,151                     4,612
     Savings accounts                                         434               777                     434                       772
     Time deposits                                          4,529            11,733                   4,546                    11,666
     Inter-bank takings                                       273               269                     272                       268

                                                           12,363            18,018                  12,403                    17,318


5.   Fees and commission income
     Credit related fees                                      266             1,614                     266                     1,614
     Commission on turnover                                 1,285             2,595                   1,285                     2,595
     Commission on off-balance sheet transactions               3                92                       3                        92
     Remittance fees                                           34                25                      34                        25
     Letters of credit commissions and fees                   197               492                     197                       492
     Facility management fee                                  715             2,255                     715                     2,255
     Other fees and commissions                             1,517             3,222                   1,489                     3,169

                                                            4,017            10,295                   3,989                    10,242


6.   Income from investments
     Dividend income                                          337               557                      337                      557
     Profit on sale of securities                               -               396                        -                       93
     Investment income                                        367                 -                       17                        -

                                                              704               953                      354                      650


7.   Operating expenses
     Staff costs (note 31)                                  8,902            14,431                   8,489                    14,018
     Depreciation (note 21)                                 1,328             1,989                   1,295                     1,915
     Auditors' remuneration                                     64                66                      57                        57
     Directors' emoluments (note 31b)                         111               164                       97                      135
     (Profit) on disposal of property and equipment            (63)              (87)                    (34)                      (88)
     Amortisation of intangible assets                          64              128                       59                      118
     Deposit insurance premium                                939             1,291                     939                     1,291
     Contract sundry expense                                  618             1,115                     618                     1,115
     Computer expense                                         596                  -                    596                          -
     Other operating expenses                               3,599             7,867                   3,705                     7,407

                                                           16,158            26,964                  15,821                    25,968




                                                                                    Annual Report and Accounts December 2009      53
     Notes to the Financial Statements cont’d
     For The Period Ended 31 December 2009




                                                                      The Group                                     The Bank
                                                             31 December                 30 June         31 December                30 June
                                                                    2009                   2009                 2009                  2009
                                                                  N’million             N’million             N’million            N’million


     8.   Taxation
          Charge
          Current tax                                                   714                   807                   692                  750
          Education tax                                                  97                   136                    91                  133
          Technology tax                                                 19                    47                    19                   46
          Capital gains tax                                               -                     8                     -                    8
          Under/(over) provision in prior years                           -                 2,482                     -                2,470
          Deferred tax charge (note 24)                                (333)               (1,096)                 (336)              (1,089)

          Charge for the period                                         497                2,385                    466                2,317


          Payable:
          At beginning of the period                                  2,551                 1,368                 2,488                1,225
          Tax paid                                                   (1,816)               (2,298)               (1,798)              (2,144)
          Income tax charge                                             811                 3,434                   783                3,361
          Technology tax                                                 19                    47                    19                   46

          At end of the period                                        1,565                2,551                  1,491                2,488


     9.   Cash and balances with the Central Bank
          Cash                                                      18,635                16,567                18,634                16,566
          Operating account with the Central Bank                    2,661                 6,506                 2,661                 6,506

                                                                    21,296                23,072                21,295                23,072
          Mandatory reserve deposits with the Central Bank           2,425                 1,822                 2,425                 1,822

                                                                    23,721                24,895                23,720                24,894


          Mandatory reserve deposits are not available
          for use in the Group's day to day operations.

     10. Treasury bills
          Treasury bills                                           164,092               161,066               164,092              161,066


          Included in Treasury Bills are bills amounting to N3.8billion (June, 2009: N3.6billion) held by third parties as collateral for
          various transactions.




54    Annual Report and Accounts December 2009
                                                           Notes to the Financial Statements cont’d
                                                                                                For The Period Ended 31 December 2009




                                                               The Group                                       The Bank
                                                      31 December                30 June            31 December                        30 June
                                                             2009                  2009                    2009                          2009
                                                          N’million            N’million                  N’million                N’million


11. Due from other banks
    Current balances with banks within Nigeria                4,251               26,569                      4,251                     26,216
    Current balances with banks outside Nigeria             24,335                19,176                     24,335                     19,176
    Provision for doubtful bank balances (note11.1)            (152)                     (83)                     (12)                     (12)


                                                            28,434                45,662                     28,574                     45,380



    Balances with banks outside Nigeria include N2.54billion (June,2009: N6.68 billion) which represents the Naira value of foreign
    currency bank balances held on behalf of customers in respect of letters of credit transactions. The corresponding liability is
    included in other liabilities. (See Note 23). The amount is not available for the day to day operations of the bank.


                                                                The Group                                       The Bank
                                                       6 months to     12 months to                  6 months to     12 months to
                                                      31 December          30 June                  31 December          30 June
                                                             2009             2009                         2009             2009
                                                          N’million            N’million                  N’million                N’million


11.1Provision for doubtful bank balances
    At the beginning of the period                               83                     310                       12                      310
    Write off                                                      -                    (310)                       -                     (310)
    Charge for the period                                        69                      83                         -                      12


    At the end of the period                                    152                      83                       12                       12



12. Loans and advances
    Overdrafts                                              74,263                74,421                     74,262                     74,421
    Term loans                                              78,080                75,889                     79,110                     75,889
    Others                                                  42,352                93,556                     42,352                     94,286


                                                           194,695              243,865                    195,725                     244,596
    Loan loss provision (note 13a)                          (23,188)             (20,686)                   (23,355)                   (21,226)
    Interest in suspense (note 13b)                         (11,210)              (8,257)                   (11,073)                    (8,257)


                                                           160,297              214,922                    161,297                     215,112



    Cash collateral against advances was N1.326 billion (June, 2009 : N1.210billion).




                                                                                            Annual Report and Accounts December 2009      55
     Notes to the Financial Statements cont’d
     For The Period Ended 31 December 2009




                                                          The Group                          The Bank
                                                 31 December           30 June    31 December            30 June
                                                        2009             2009            2009              2009
                                                    N’million         N’million      N’million          N’million
     12. Loans and advances (contd.)

          Analysis by security
          Secured against real estate                 18,094            22,662         18,719             23,393
          Otherwise secured                          174,506           218,579        174,906            218,579
          Unsecured                                    2,095             2,624          2,100              2,624


                                                     194,695           243,865        195,725            244,596



          Analysis by performance
          Performing                                 134,947           196,319        135,942            196,511
          Non-performing:
          - substandard                               15,923            15,376         15,923             15,376
          - doubtful                                  22,068            13,456         22,048             13,456
          - lost                                      10,547            10,457         10,739             10,996
          Interest in suspense                        11,210             8,257         11,073              8,257


                                                     194,695           243,865        195,725            244,596



          Analysis by maturity
          0 - 30 days                                 91,787           103,516         88,178            104,477
          1 - 3 months                                38,162            60,235         42,961             60,136
          3 - 6 months                                10,051            34,091         10,051             34,035
          6 - 12 months                               14,241            15,983         14,241             15,957
          Over 12 months                              40,454            30,039         40,294             29,990


                                                     194,695           243,865        195,725            244,596




56    Annual Report and Accounts December 2009
                                               Notes to the Financial Statements cont’d
                                                                             For The Period Ended 31 December 2009




                                                    The Group                               The Bank
                                           31 December           30 June         31 December                        30 June
                                                  2009             2009                 2009                          2009
                                              N’million         N’million              N’million                N’million


13. Loan loss provision and interest in suspense

   a.   Movement in loan loss provision
        At beginning of the period:
        - Non-performing                        18,723             2,930                  19,261                      2,977
        - Performing                             1,963             2,213                   1,965                      1,965

                                                20,686             5,143                  21,226                      4,942



        Additional provision:
        - Non-performing                         5,594            18,717                   5,237                    19,459
        - Performing                            (1,949)                -                  (1,965)                        -
        Provision no longer required                 -                 -                       -                         -
        Recoveries                                (427)             (402)                   (427)                     (402)


                                                 3,218            18,315                   2,845                    19,056
        Amounts written off                       (716)           (2,772)                   (716)                    (2,772)


                                                 2,502            15,543                   2,129                    16,284



        At end of the period:
        - Non-performing                        23,174            18,723                  23,355                    19,261
        - Performing                                14             1,963                       -                     1,965


                                                23,188            20,686                  23,355                    21,226



   b.   Movement in interest-in-suspense
        At beginning of the period               8,257             4,021                   8,257                      4,021
        Suspended during the year                4,726             4,521                   4,588                      4,521
        Amounts written back                         -                (55)                     -                         (55)
        Recoveries                                (737)                 -                   (737)                          -
        Amounts written off                     (1,036)             (229)                 (1,036)                      (229)


        At end of the period                    11,210             8,257                  11,073                      8,257




                                                                         Annual Report and Accounts December 2009       57
     Notes to the Financial Statements cont’d
     For The Period Ended 31 December 2009




                                                                        The Group                          The Bank
                                                               31 December           30 June    31 December            30 June
                                                                      2009             2009            2009              2009
                                                                    N’million       N’million      N’million          N’million


     14. Diminution in assets value

          The charge for the period is analysed as follows:
          Loans and advances – specific (note 13a)                  5,594             18,717           5,237            19,459
          Loans and advances – general (note 13a)                  (1,949)                 -          (1,965)                -
          Recoveries on previously written-off accounts (note 13a)   (427)              (402)           (427)             (402)

          Loans and advances (note 13)                                   3,218        18,315          2,845             19,056
          Provision on advances under finance lease (note 15)             (211)          236           (211)               236
          Provision for diminution of investments                          408         3,662            454              2,345
          Provision for other assets (note 20)                             392         1,181            437              1,047
          Provision for doubtful cash and cash equivalent (note 11.1)       69            83              -                 12

                                                                         3,876        23,477          3,525             22,696


     15. Advances under finance lease
          Gross investment                                              15,454        15,790         15,454             15,790
          Unearned income                                                 (275)          (52)          (275)                (52)

          Net investment                                                15,179        15,738         15,179             15,738
          Provisions                                                       (78)         (289)           (78)              (289)

                                                                        15,101        15,449         15,101             15,449

          Analysis by performance:
          Performing                                                    14,704        14,875         14,704             14,875

          Non-performing
          - substandard                                                   437            793            437                793
          - doubtful                                                        5             17              5                 17
          - lost                                                           32             52             32                 52

                                                                        15,179        15,738         15,179             15,738

          Analysis by maturity
          0 - 30 days                                                      123             -            123                  -
          1 - 3 months                                                     128             -            128                  -
          3 - 6 months                                                     254         1,968            254              1,968
          6 - 12 months                                                  1,529         2,651          1,529              2,651
          Over 12 months                                                13,145        11,119         13,145             11,119

                                                                        15,179        15,738         15,179             15,738




58    Annual Report and Accounts December 2009
                                            Notes to the Financial Statements cont’d
                                                                         For The Period Ended 31 December 2009




                                                 The Group                              The Bank
                                        31 December           30 June        31 December                        30 June
                                               2009             2009                2009                          2009
                                            N’million        N’million             N’million                N’million


15. Advances under finance lease (contd.)

   Analysis by tenure
   Current portion                             4,710            4,883                  4,710                     4,883
   Long term portion                          10,469           10,855                 10,469                    10,855

                                              15,179           15,738                 15,179                    15,738


   Movement in advances under finance
   lease provision:
   At beginning of the period:
   - Non-performing                              140               53                     140                       53
   - Performing                                  149                -                     149                        -

                                                 289               53                     289                       53

   Additional provision:
   - Non-performing                                -               87                       -                       87
   - Performing                                 (149)             149                    (149)                     149
   Provision no longer required                  (62)               -                     (62)                       -
   Amounts written off                             -                -                       -                        -

                                                (211)             236                    (211)                     236

   At end of the period:
   - Non-performing                               78              140                      78                      140
   - Performing                                    -              149                       -                      149

                                                  78              289                      78                      289



16. Insurance receivables
   Due from contract holders                      61              195                      61                      195
   Provision for doubtful receivables              -                -                       -                        -

                                                  61              195                      61                      195




                                                                     Annual Report and Accounts December 2009      59
     Notes to the Financial Statements cont’d
     For The Period Ended 31 December 2009




                                                                      The Group                           The Bank
                                                             31 December           30 June     31 December            30 June
                                                                    2009             2009             2009              2009
                                                                 N’million        N’million       N’million          N’million


     17. Investment securities

          a     Long term investments
                Debt Securities - at cost: Listed
                Neimeth International Pharmaceuticals Plc
                - Debentures(MRR+7.5%,2008)                             3               13               3                 13
                Crusader Insurance Convertible Debenture (2009)       301              301             301                301

                Debt Securities - at cost: Unlisted
                Neimeth Convertible Debenture Stock 2009                 -              20                -                20

                Equity securities - at cost: Listed
                Afprint Nigeria Plc                                     2                2               2                  2
                Daar Communication plc                                259              259             259                259
                Dangote Flour Mill                                      5                5               5                  5

                Equity securities - at cost: Unlisted
                Nigeria International Growth Fund                   1,897            1,897           1,897              1,897
                Investment in Central Security Clearing System         96               96              96                 96
                Valu Card Nigeria Plc                                 510              510             510                510
                Nigeria Interbank Settlement System Plc                33               33              33                 33
                African Export and Import Bank                          5                5               5                  5
                MB Petroleum and Gas Limited                           51               51              51                 51
                Agro-Tec and Farms Limited                             30               30              30                 30
                Pioneer Sorting Consortium Limited                     25               25              25                 25
                East Line Equity Investment in Kezlins Limited         20               20              20                 20
                TINAPA Business Resort Limited                        500              500             500                500
                African Finance Corporation                           638              638             638                638
                ATM Consortium                                         21               21              21                 21
                Finconneckt                                            80               80              80                 80
                Mayfair                                               343              343             343                343
                MTN Nigeria                                         5,096            5,096           5,096              5,096
                SME Partnership LP                                    368              353             368                353
                SMIES Investment                                      413              413             413                413

                                                                   10,696           10,711          10,696             10,711
                Provisions for diminution in value (note 17.1)      (2,042)          (1,759)         (2,042)            (1,759)

                                                                    8,654            8,952           8,654              8,952




60    Annual Report and Accounts December 2009
                                                             Notes to the Financial Statements cont’d
                                                                                               For The Period Ended 31 December 2009




                                                                 The Group                                     The Bank
                                                        31 December                30 June          31 December                        30 June
                                                               2009                  2009                  2009                          2009
                                                             N’million            N’million               N’million                N’million

17.         Investment securities (contd.)
17.1        Provision for diminution in
            value of investment
            At beginning of the period                          1,759                   122                   1,759                         57
            Charge for the year                                   488                 1,637                     488                      1,702
            Write Back/no longer required                        (203)                    -                    (203)                         -
            Written off                                             (2)                   -                       (2)                        -

            At end of the period                                2,042                 1,759                   2,042                      1,759


      b     Short term investments
            Equity securities - at lower of cost or market value
            Listed                                               4,494                4,299                         -                        -
            Unlisted                                                47                   59                         -                        -

                                                                 4,541                4,358                         -                        -
            Provision for diminution in value (Note 17.2)       (2,177)              (2,052)                        -                        -

                                                                2,364                 2,306                         -                        -


17.2        Provision for diminution in value
            At beginning of the period                          2,052                    27                         -                        -
            Charge for the period                                 125                 2,025                         -                        -

            At end of the period                                2,177                 2,052                         -                        -

            Total Investment securities                        11,018                11,258                   8,654                      8,952

            Movement in long term investments
            At beginning of the period                         10,711                 4,866                  10,711                      4,576
            Additions                                               15                6,135                      15                      6,135
            Disposals                                              (30)                (290)                    (30)                         -

                                                               10,696                10,711                  10,696                    10,711
            Provision for diminution in value                   (2,042)              (1,759)                 (2,042)                    (1,759)

            At end of the period                                8,654                 8,952                   8,654                      8,952


      i.    The market value of short term investments are Group N2.212 billion (June, 2009 : N2.362billion).

            The market value of long term listed investments are Group N1.892 billion (June, 2009 : N1.656 billion) and Bank N1.999
            billion (June 2008 : N1,670 billion).

      ii.   Included in listed debt securities is Nil billion (June, 2009 : Nil billion) in various Federal Government of Nigeria
            Bonds.




                                                                                            Annual Report and Accounts December 2009      61
     Notes to the Financial Statements cont’d
     For The Period Ended 31 December 2009




     17.2         Provision for diminution in value (Cont'd)

           iii.   The Bank makes investments under the Small and Medium Enterprises Equity Investment Scheme (SMEEIS) per the Policy
                  Guidelines for 2001 Fiscal Year (Monetary Policy Circular No. 35). Included in unlisted long term investments are the Bank's
                  investment under the Small and Medium Industries Equity Investment Scheme (SMIEIS). A total of N862.3 million (June 2009:
                  N766 billion) have so far been invested under the scheme. Due to the effective percentage holding of the bank in these
                  companies, some of them qualify as associates. However, they are not consolidated as the bank is not expected to
                  exercise influence, and control is temporary, as the investments are expected to be realised within 5 years.

                                                                       The Group                                     The Bank
                                                              31 December                 30 June         31 December                30 June
                                                                     2009                   2009                 2009                  2009
                                                                   N’million             N’million            N’million            N’million


     18.          Investment in subsidiaries
                  Fidelity Securities Limited                             54                      -               1,203                1,203
                  Fidelity Pension Managers                               61                      -                 427                  427
                  Provision for diminution in value                        -                      -                (815)                (644)

                                                                            -                     -                 815                  986



     18.1         Provision for diminution in value
                  At start of the period                                    -                     -                 644                    -
                  Charge for the period                                     -                     -                 171                  644

                  At the end of the period                                  -                     -                 815                  644



           i.     All the subsidiary companies were incorporated in Nigeria. The results of all the subsidiaries in operation as at date have
                  been consolidated with those of the Bank. The condensed financial statements of the consolidated subsidiaries are
                  included in Note 19.

           ii.    Fidelity Securities Limited was established as a private limited liability company on 24 October, 1989 and commenced
                  operations in September 1990. It has two wholly owned subsidiaries; FUSL Insurance Brokers Limited and FUSL Nominees
                  Limited. Fidelity Bank PLc became the holding company of the entity. The group is engaged in trading in securities, stocking-
                  broking activities, insurance brokererage, financial advisory services and trading in telecommunications products.

           iii.   Fidelity Pension Managers Limited was incorporated on 22 September, 2004 as Alliance Management Limited. Following the
                  enactment of the Pension Reform Act 2004, Alliance Management got Approval in principle on 22 November, 2006 from
                  PENCOM to be registered as Pension Fund Administrator. By a special resolution of the members of the board, the company
                  changed its name to Fidelity Pension Managers Limited on 27 November, 2006. It commenced operations on 19 October,
                  2007 in five locations - Lagos(Head Office), Awka, Enugu, Port-Harcourt and Abuja. It currently operates from thirty-two
                  locations spread across the country. The company got the approval of Pension Commission (PENCOM) to carry out the
                  business of Pension Fund Administrator.

                  All the group companies have the same reporting period.




62    Annual Report and Accounts December 2009
                                           Notes to the Financial Statements cont’d
                                                                    For The Period Ended 31 December 2009




                                                                              Fidelity Pension
                                                        Fidelity                 Fund
                                                      Securities        Management
                                                        Limited              Limited                 Total
                                                    6 months to          6 months to            6 months to
                                                   31 December          31 December            31 December
                                                          2009                   2009                2009
                                                       N’million            N’million             N’million
19. Condensed results of consolidated entities
   Condensed profit and loss
   Operating income                                         786                       66                      852
   Operating expenses                                      (220)                    (110)                    (330)
   Provision expense                                       (922)                      (5)                    (927)

   (Loss) before tax                                       (356)                     (49)                    (405)
   Tax                                                      (28)                       -                      (28)

   (Loss) for the period                                   (384)                     (49)                    (433)


   Condensed Financial position
   Assets
   Cash and balances with central banks                      70                        -                      70
   Due from other banks                                     306                      197                     503
   Loans and advances to customers                        1,427                        -                   1,427
   Investment securities                                  2,349                       15                   2,364
   Other assets                                             904                       93                     997
   Intangible assets                                          -                       25                      25
   Property and equipment                                   252                       61                     313

                                                          5,308                      391                   5,699

   Financed by:
   Customer deposits                                        370                        -                     370
   Due to other banks                                     4,633                      177                   4,810
   Current income tax                                        74                        -                      74
   Other liabilities                                        617                       15                     632
   Deferred income tax liabilities                            2                        -                       2
   Retirement benefit obligations                             -                        -                       -
   Equity and reserves                                     (388)                     199                    (189)

                                                          5,308                      391                   5,699

   Condensed cash flow
   Net cash from operating activities                    (1,786)                     (22)                  (1,808)
   Net cash from financing activities                     1,437                        -                    1,437
   Net cash from investing activities                        (22)                     17                        (5)

   Increase in cash and cash equivalents                   (371)                       (5)                   (376)

   At period start                                       (3,817)                     202                   (3,615)
   At period end                                         (4,188)                     197                   (3,991)

                                                           (371)                       (5)                   (376)




                                                                Annual Report and Accounts December 2009      63
     Notes to the Financial Statements cont’d
     For The Period Ended 31 December 2009




                                                                          The Group                         The Bank
                                                           31 December                30 June    31 December            30 June
                                                                  2009                  2009            2009              2009
                                                              N’million           N’million         N’million          N’million


     20. Other assets
          Interest and fee receivable                            1,510                  2,882          1,510              2,882
          Prepayments                                            4,602                  4,838          3,956              4,235
          Accounts receivable                                      989                    702            720                870
          Other receivables                                      2,106                  1,776          2,165              1,776

                                                                 9,207                10,198            8,351             9,762
          Provision for doubtful receivables (note 20.1)        (1,230)                (1,295)         (1,243)           (1,158)

                                                                 7,977                  8,903          7,108              8,604



     20.1Movement in provision for doubtful
         receivables:
          At beginning of the period                             1,295                  1,643          1,158              1,639
          Opening balance adjustments                               39                      -              -                  -
          Amounts written off                                     (496)                (1,528)          (352)            (1,528)

                                                                   838                   115             806                111

          Additional provision                                     392                  1,181            437              1,047

          Per profit and loss account (note 14)                    392                  1,181            437              1,047

          At 31 December                                         1,230                  1,295          1,243              1,158



     21. Intangible assets
          At beginning of the period                               384                    512            354                472
          Amortisation                                             (64)                  (128)           (59)              (118)

          Net book value                                           320                   384             295                354




64    Annual Report and Accounts December 2009
                                               Notes to the Financial Statements cont’d
                                                                         For The Period Ended 31 December 2009




                               At beginning               Disposals/              Reclassi-               At end of
                              of the period   Additions   Write-offs              fications              the period
                                  N’million   N’million    N’million              N’million                N’million


21.1Property and equipment

   Group

   Cost
   Work in progress                  8,159         943             (6)               (2,565)                    6,531
   Leasehold improvements            1,547         441           (37)                   119                     2,070
   Land and buildings                9,147         343           (34)                 1,613                    11,069
   Motor vehicles                    3,109         137           (93)                     5                     3,158
   Office equipment                  5,233         238             (5)                  168                     5,634
   Computer hardware                 2,615         276             (5)                  640                     3,526
   Furniture and fittings            1,164         133              -                    20                     1,317

                                    30,974       2,511         (180)                        -                  33,305



   Accumulated depreciation
   Leasehold improvements              600         147           (18)                     28                      757
   Land and buildings                  509         190              -                    (18)                     681
   Motor vehicles                    1,592         326           (86)                      -                    1,832
   Office equipment                  2,857         349             (2)                   (30)                   3,174
   Computer hardware                 1,221         242              -                     20                    1,483
   Furniture and fittings              659          74              -                      -                      733

                                     7,438       1,328         (106)                        -                   8,660



   Net book value
   Work in progress                  8,159                                                                      6,531
   Leasehold improvements              948                                                                      1,314
   Land and buildings                8,638                                                                     10,388
   Motor vehicles                    1,516                                                                      1,326
   Office equipment                  2,375                                                                      2,459
   Computer hardware                 1,394                                                                      2,043
   Furniture and fittings              505                                                                        584

                                    23,535                                                                     24,645




                                                                    Annual Report and Accounts December 2009     65
     Notes to the Financial Statements cont’d
     For The Period Ended 31 December 2009




                                                 At beginning                         Disposals/               Reclassi-            At end of
                                                 of the period    Additions           Write-offs               fications           the period
                                                     N’million    N’million             N’million              N’million            N’million


     21.1Property and equipment (contd.)

          Bank

          Cost
          Work in progress                              8,159           943                      (6)              (2,565)               6,530
          Leasehold improvements                        1,547           441                    (37)                  119                2,070
          Land and buildings                            8,909           340                      (5)               1,613               10,859
          Motor vehicles                                3,017           137                    (85)                    5                3,074
          Office equipment                              5,107           230                      (5)                 168                5,500
          Computer hardware                             2,615           276                      (5)                 640                3,526
          Furniture & fittings                          1,095           132                       -                   20                1,247

                                                       30,449         2,499                   (143)                     -              32,805



          Accumulated Depreciation
          Leasehold improvements                          600           147                    (18)                   28                  756
          Land and buildings                              491           185                       -                  (18)                 658
          Motor vehicles                                1,525           311                    (78)                    -                1,758
          Office equipment                              2,801           343                      (2)                 (30)               3,112
          Computer hardware                             1,221           239                       -                   20                1,480
          Furniture & fittings                            638            70                       -                    -                  706

                                                        7,276         1,295                    (98)                     -               8,470


          Net Book Value
          Work in progress                              8,159                                                                           6,530
          Leasehold improvements                          948                                                                           1,314
          Land and buildings                            8,418                                                                          10,201
          Motor vehicles                                1,491                                                                           1,316
          Office equipment                              2,305                                                                           2,387
          Computer hardware                             1,394                                                                           2,046
          Furniture & fittings                            457                                                                             541

                                                       23,173                                                                          24,335



          The Group applies the straight line method of depreciation to its property and equipment to allocate the cost of the assets over their
          estimated economic useful life.

          Work in progress represents construction costs in respect of new offices. On completion of construction, the related amounts are
          transferred to other categories of property and equipment.




66    Annual Report and Accounts December 2009
                                        Notes to the Financial Statements cont’d
                                                                         For The Period Ended 31 December 2009




                                                   The Group                                     The Bank
                                    31 December                30 June       31 December                        30 June
                                           2009                  2009               2009                          2009
                                       N’million          N’million                N’million                N’million


21.2Equipment on lease

   Cost:
   At the beginning of the period         1,052                  1,052                 1,052                      1,052
   Reclassified                            (830)                     -                  (830)                         -

   At the end of the period                 222                  1,052                    222                     1,052

   Depreciation:
   At the beginning of the period         1,052                  1,052                 1,052                      1,052
   Charge for the year                     (830)                     -                  (830)                         -

   At the end of the period                 222                  1,052                    222                     1,052

   Net book value:                             -                     -                       -                        -



22. Customer deposits
   Current deposits                     131,597            131,078                  132,309                     131,445
   Savings deposits                      24,381             25,291                   24,380                      25,291
   Term deposits                        119,730            187,834                  119,731                     187,834
   Domiciliary deposit                   12,388             11,567                   12,388                      11,567

                                        288,096            355,770                  288,808                     356,137



   Analysis by maturity
   0 - 30 days                          188,596            232,897                  157,641                     234,867
   1-3 months                            42,784             52,834                   92,727                      53,283
   3-6 months                            53,193             65,689                   27,792                      66,509
   6-12 months                            1,142              1,410                    7,293                       1,422
   Over 12 months                         2,381              2,940                    3,355                          55

                                        288,096            355,770                  288,808                     356,137




                                                                     Annual Report and Accounts December 2009      67
     Notes to the Financial Statements cont’d
     For The Period Ended 31 December 2009




                                                                               The Group                                    The Bank
                                                             31 December                   30 June        31 December                  30 June
                                                                    2009                     2009                2009                    2009
                                                                  N’million             N’million              N’million            N’million


     23. Other liabilities
          Customers' deposit for letters of credit                    2,541                  6,684                 2,541                 6,684
          Interest payable                                            2,850                  2,106                 2,850                 2,106
          Account payables                                            2,912                  4,159                 2,849                 3,215
          Other                                                       5,809                  4,666                 4,875                 3,536

                                                                     14,112                17,615                13,115                15,541



     24. Deferred taxes
          Deferred tax liabilities                                         3                  336                       -                 336

          Movement in deferred taxes:
          At start of the period                                        336                  1,433                   336                 1,425
          Charge for the period                                        (333)                (1,096)                 (336)               (1,089)

          At end of the period                                             3                  336                       -                 336



          The computation of deferred taxation as at period end resulted in an asset of N999,114,648 (June 2009: liability of N336m) which
          is not recognised in these financial statements as there is no reasonable expectation of its realisation. However, the brought forward
          liability has been released.




68    Annual Report and Accounts December 2009
                                                         Notes to the Financial Statements cont’d
                                                                                             For The Period Ended 31 December 2009




                                                                      The Group                                      The Bank
                                                    31 December                   30 June        31 December                        30 June
                                                           2009                     2009                2009                          2009
                                                         N’million            N’million                N’million                N’million

25. Retirement benefit obligations
   Defined contribution schemes                               281                    288                     281                       288
   Defined benefit schemes                                  1,017                      -                   1,017                         -

                                                            1,298                    288                   1,298                       288


   Movement in the defined contribution liability
   recognised in the balance sheet:
   At beginning of the period                                  288                    258                     288                       258
   Charge to profit and loss                                   259                    336                     259                       336
   Refund from old investment (Linkage Assurance)                -                     72                                                72
   Contributions remitted                                     (266)                  (377)                   (266)                     (377)

   At end of the period                                       281                    288                      281                      288


   The Group and its employees make a joint contribution of 15% of basic salary, housing and transport allowance to each employee’s
   retirement savings account maintained with their nominated Pension Fund Administrators.

                                                                       The Group                                             The Bank
                                                    31 December                 30 June          31 December                    30 June
                                                           2009                   2009                  2009                       2009
                                                         N’million            N’million                N’million                N’million
   Movement in the defined benefit liability
   recognised in the balance sheet:
   At start of the period                                       -                       -                      -                          -
   Charge to profit and loss                                1,017                       -                  1,017                          -

   At end of the period                                     1,017                       -                  1,017                          -


   The Group operates a defined benefit scheme where qualifying employees receive a lump sum payment based on the number of
   years served after an initial qualifying period of 5 years and gross salary on date of retirement.

                                                                      The Group                                              The Bank
                                                    31 December                   30 June        31 December                    30 June
                                                           2009                     2009                2009                       2009
                                                         N’million            N’million                N’million                N’million
   The principal actuarial assumptions used were
   as follows:
   Discount rate                                                12%                   12%                      12%                     12%
   Average rate of inflation                                    10%                   10%                      10%                     10%
   Future salary increases                                      10%                   10%                      10%                     10%

                                                                32%                   32%                      32%                     32%




                                                                                         Annual Report and Accounts December 2009      69
     Notes to the Financial Statements cont’d
     For The Period Ended 31 December 2009




                                                                     The Group                             The Bank
                                                      31 December                30 June    31 December               30 June
                                                             2009                  2009            2009                 2009
                                                         N’million           N’million         N’million          N’million


     26. Non controlling interest
          At beginning of the period                          287                    837               -                    -
          Adjustment in group reserves                       (924)                     -
          Rights issues taken up                              515                      -
          Call in arrears                                      68                      -
          Consolidation adjustment                            146                      -
          Movement on consolidation reserves                    -                   (147)              -                    -
          Transfer from profit and loss                      (191)                  (403)              -                    -

          At end of the period                                (99)                  287                -                    -



     27. Share capital
          Authorised:
          32 billion ordinary shares of 50k each           16,000                16,000          16,000                16,000



                                                                                                  Group              Bank
                                                                                            31 December       31 December
                                                                                                   2009              2009
                                                                                 Number        N’million          N’million
          Issued and fully paid:
          Ordinary shares
          Ordinary share of 50k each 28,962,585,691
          At beginning of the period                                              28,963         14,481                14,481
          Transfer from share premium                                                  -              -                     -

          At end of the period                                                    28,963         14,481                14,481



                                                                                                  Group                 Bank
                                                                                                   2009                 2009
                                                                                               N’million          N’million


          Share premium
          At beginning of the period                                                            101,272               101,272

          At end of the period                                                                  101,272               101,272




70    Annual Report and Accounts December 2009
                                                            Notes to the Financial Statements cont’d
                                                                                              For The Period Ended 31 December 2009




                                           Statutory        SMIEIS               Retained                  Capital
                                             reserve        reserve              earnings                  reserve                     Total
                                           N’million       N’million             N’million               N’million                N’million
28. Reserves

   Group
   At beginning of the period                 8,283              764                 2,752                   1,867                    13,666
   Arising during the year                        -                -                     -                      48                         48
   Dividend paid                                  -                -                (1,448)                      -                     (1,448)

                                              8,283              764                 1,304                   1,915                    12,266
   Adjustments in non-controlling interest        -                -                   924                       -                       924
   Transfer from profit and loss account        424                -                 1,324                       -                     1,748

   At end of the period                       8,707              764                 3,552                   1,915                    14,938


   In respect of the current period ,the Directors propose that a dividend of 2.5 kobo per ordinary share will be paid to the
   shareholders. This dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a
   liability in these financial statements. Dividend to shareholders is now accounted for on the date of declaration as they do not meet
   the criteria of present obligation in accordance with Statement of Accounting Standard (SAS) 23. The proposed dividend is subject
   to withholding tax at the appropriate tax rate and is payable to shareholders whose names appear on the Register of Members as
   at closure date. The total estimated dividend to be paid is N724,064,643.

                                           Statutory        SMIEIS               Retained                  Capital
                                             reserve        reserve              earnings                  reserve                     Total
                                           N’million       N’million             N’million               N’million                N’million


   Bank
   At beginning of the period                 8,283              764                 2,707                   1,867                    13,621
   Dividend paid                                  -                -                (1,448)                      -                     (1,448)

                                              8,283              764                 1,259                   1,867                    12,173
   Transfer from profit and loss account        424                -                   990                       -                     1,414

   At end of the period                       8,707              764                 2,249                   1,867                    13,587




   Nigerian banking regulations require the bank to make an annual appropriation to a statutory reserve. As stipulated by s16(1) of
   the Banks and Other Financial Institutions Act of 1991 (amended), an appropriation of 30% of profit after tax is made if
   the statutory reserve is less than the paid-up share capital and 15% of profit after tax if the statutory reserve is greater than the
   paid up share capital.

   The SMEIS reserve is maintained to comply with the Central Bank of Nigeria (CBN) requirement that all licensed banks set aside a
   portion of the profit after tax in a fund to be used to finance equity investments in qualifying small and medium scale enterprises.
   Under the terms of the guidelines (amended by CBN letter dated 11 July 2006), the contributions will be 10% of profit after tax
   and shall continue after the first 5 years but banks’ contributions shall thereafter reduce to 5% of profit after tax. However, this
   is no longer mandatory. The small and medium scale industries equity investment scheme reserves are non-distributable.




                                                                                           Annual Report and Accounts December 2009      71
     Notes to the Financial Statements cont’d
     For The Period Ended 31 December 2009




     29. Contingent liabilities and commitments

          a.    Legal proceedings
                The Group in the ordinary course of business is presently involved in Sixty-eight (68) litigation suits none of which may give
                rise to any material contingent liability.

                The Directors are of the opinion that none of the aforementioned cases is likely to have a material adverse effect on the Bank
                and are not aware of any other pending or threatened claims and litigations.

          b.    Capital commitments
                At the balance sheet date, the Bank had capital commitments amounting to N627 million (June, 2009:N1.618 billion)
                in respect of authorized and contracted capital projects.

          c.    Off balance sheet engagements
                In the normal course of business, the Group is party to financial instruments with off-balance sheet risk. The instruments are
                used to meet the credit and other financial requirements of customers. The contractual amounts of the off-balance sheet
                financial instruments are:

                                                                              The Group                                   The Bank
                                                             31 December                  30 June       31 December                  30 June
                                                                    2009                    2009               2009                    2009
                                                                  N’million            N’million             N’million            N’million


          Performance bonds and guarantees                          91,344                36,158                91,344               36,158
          Letters of credit                                         29,816                22,885                29,816               22,885

                                                                   121,160                59,043              121,160                59,043




72    Annual Report and Accounts December 2009
                                           30. Related party transactions
                                              A number of banking transactions are entered into with related parties in the normal course of business. These include loans, deposits and foreign currency transactions. The volumes
                                              of related-party transactions, outstanding balances at the period end, and relating expense and income for the period are as follows:

                                              Risk assets outstanding as at 31 December 2009
                                              Direct credit assets
                                              Included in loans and advances is an amount of N5.697 billion (June, 2009 : N10.272 billion) representing credit facilities to companies in which certain directors and shareholders
                                              have interests. The balances as at 31 December, 2009 are as follows:
                                                                                                                               Facility
                                              Name of company/individual                   Relationship                        type             N’million        Status              Security status

                                              Equipment Solutions and Logistics             Mr. Ik. Mbagwu (Director)            Lease           (337.37)       Performing          Legal ownership of the vehicles
                                                                                                                                                                                    procured and registered in the name
                                                                                                                                                                                    of the Bank, Acknowledged
                                                                                                                                                                                    irrevocable instruction to Flour Mills
                                                                                                                                                                                    to domicile payment with Fidelity
                                                                                                                                                                                    Bank, Executed promissory Note,
                                                                                                                                                                                    Lien over 20% equity cont,
                                                                                                                                                                                    Personal Guarantee and notarised
                                                                                                                                                                                    statement of networth.

                                              Equipment Solutions and Logistics             Mr. Ik. Mbagwu (Director)            OD               (14.94)       Performing          Legal ownership of the vehicles procured
                                                                                                                                                                                    and registered in the name of the Bank,
                                                                                                                                                                                    Acknowledged irrevocable instruction to
                                                                                                                                                                                    Flour Mills to domicile payment with
                                                                                                                                                                                    Fidelity Bank, Executed promissory Note,
                                                                                                                                                                                    Lien over 20% equity cont,
                                                                                                                                                                                    Personal Guarantee and notarised
                                                                                                                                                                                    statement of networth.

                                              Fidelity Securities Limited                   Subsidiary                           OD            (4,638.66)       Performing          Negative pledge of FSL.

                                              Geolis and Co. Nig. Limited                   Dim Elias Nwosu (Director)           OD              (328.03)       Performing          Legal Mortgage over a property at 23,
                                                                                                                                                                                    Norman Williams st, Ikoyi and Legal Mortgage
                                                                                                                                                                                    over a property at 54, James Robertson S/L
                                                                                                                                                                                    both belonging to Chief Elias Nwosu and Chief
                                                                                                                                                                                    G.C. Ezebube, Lien on 300M units of blue Chip
                                                                                                                                                                                    Companies, Lien on Shipping Documents.

                                              John Holt Plc                                 Chief Christopher Ezeh (Chairman)    Lease           (176.86)       Performing          Domiciliation of payment from Zain Nigeria




Annual Report and Accounts December 2009
                                                                                                                                                                                    Plc of at least N90M on Site Maintenance
                                                                                                                                                                                    and N156M for diesel Supply to Fidelity
                                                                                                                                                                                    Bank Plc, Legal ownership of the vehicles to




73
                                                                                                                                                                                    be procured and registered in the name of
                                                                                                                                                                                                                                                                              Notes to the Financial Statements cont’d
                                                                                                                                                                                                                                      For The Period Ended 31 December 2009




                                                                                                                                                                                    the bank, Execution of a lease
                                                                                                                                                                                    Agreement.
74
                                                                                                                                      Facility
                                                 Name of company/individual                      Relationship                         type            N’million     Status               Security status

                                                 John Holt Plc - Lease Rental                    Chief Christopher Ezeh (Chairman)    OD                   (4.86)   Performing           Domiciliation of payment from Zain Nigeria
                                                                                                                                                                                         Plc of at least N90M on Site Maintenance
                                                                                                                                                                                         and N156M for diesel Supply to Fidelity
                                                                                                                                                                                         Bank Plc, Legal ownership of the vehicles to
                                                                                                                                                                                         be procured and registered in the name of
                                                                                                                                                                                         the Bank, Execution of a lease Agreement,Co

                                                 Namjid Com. Limited                             Chief Nnamdi Oji (Director)          OD                  (96.68)   Performing           Lien on blue chip shares with current value
                                                                                                                                                                                         of N140million with letter of consent to




Annual Report and Accounts December 2009
                                                                                                                                                                                         Fidelity bank to sell the shares, Personal
                                                                                                                                                                                         Guarantee and Statement of Networth of
                                                                                                                                                                                                                                          For The Period Ended 31 December 2009




                                                                                                                                                                                         Chairman/CEO of Namjid Chief. Nnamdi Oji.

                                                 Obiaku Okam                                     Arch. Augustine W. U. Okam           Lease                (5.90)   Performing           Personal Guarantee and Statement of
                                                                                                 (Director)                                                                              Networth. of (Director) Arch. A.W.U. Okam.

                                                 Rossies Textiles Mill Limited                   Chief Nnamdi Oji (Director)          OD                  (58.72)   Performing           Legal Mortgage on No 172 and No 178 Nnobi
                                                                                                                                                                                         Surulere, Legal Mortgage on No.49A Milverton
                                                                                                                                                                                         Avenue, Aba, Personal Guarantee and
                                                                                                                                                                                         Statement of Networth of Chairman/MD
                                                                                                                                                                                         Rossies Textile Mills Ltd, Chief Jonah I. Oji.
                                                                                                                                                                                                                                                                                  Notes to the Financial Statements cont’d




                                                 Orazulike Trading Company Limited               Ichie Nnaeto Orazulike (Director)    IFF                 (15.02)   Performing           Lien on shipping documents, 30%
                                                                                                                                                                                         contribution, Personal
                                                                                                                                                                                         Guarantee of Nnaeto Orazulike.

                                                 Associated Haulages (Nig.) Limited              Mallam Umar Yahaya (Director)        OD                  (20.56)   Performing           Legal Mortgage, Lien on trucks, Personal
                                                                                                                                                                                         Guarantee, Post Dated Cheques.

                                                                                                                                                      5,697.60



                                           Director related service providers:
                                           Some of the Directors are aslo Directors of some companies with which the Bank does business. All the transactions are done at arms lenght.

                                           S/N        Company                         Area of Specialization                     Related Directors                  Designation
                                           1.         John Holt Plc                   Generators/Technical Services              Chief Christopher Ezeh             Chairman

                                           2.         Integrated Consultants Ltd      Architects, Builders,                      Arc. Augustine W. U. Okam          Non Executive
                                                                                      Dev. Consultants,
                                                                                      Project Managers

                                           3.         CN Architects Ltd               Architects, Project Managers               Dim Elias E. Nwosu                 Non Executive
                                                         Notes to the Financial Statements cont’d
                                                                                          For The Period Ended 31 December 2009




                                                                    The Group                                             The Bank
                                                   31 December                  30 June       31 December                    30 June
                                                          2009                    2009               2009                       2009
                                                         Number                 Number               Number                      Number


31. Employees and directors
   a.   Employees
        The average number of persons employed by
        the Group during the period was as follows:
        Executive directors                                     5                     4                     5                         4
        Management                                            458                   454                   444                       443
        Non-management                                      3,596                 3,611                 2,991                     2,804

                                                            4,059                 4,069                 3,440                     3,251



        Compensation for the above staff (excluding executive directors):

                                                        N’million           N’million               N’million                N’million


        Salaries and wages                                  7,607               14,096                  7,194                    13,682
        Pension costs:-
        - Defined contribution plans                          278                  336                    278                       336
        - Defined benefit plans                             1,017                    -                  1,017                         -

                                                            8,902               14,431                  8,489                    14,018



   The number of employees of the Group, other than directors, who received emoluments in the following ranges
   (excluding pension contributions), were:

                                                         Number                 Number               Number                      Number


   N300,001     -    N2,000,000                             2,180                 2,171                 1,645                     1,451
   N2,000,001   -    N2,800,000                               249                   241                   241                       241
   N2,800,001   -    N3,500,000                               281                   268                   248                       248
   N3,500,001   -    N4,000,000                                 -                   370                     -                       334
   N4,000,001   -    N5,500,000                               652                   311                   638                       304
   N5,500,001   -    N6,500,000                               230                   228                   215                       217
   N6,500,001   -    N7,800,000                               162                   171                   160                       161
   N7,800,001   -    N9,000,000                               122                   117                   116                       115
   N9,000,001 and above                                       173                   184                   167                       172

                                                            4,049                 4,061                 3,430                     3,243




                                                                                      Annual Report and Accounts December 2009      75
     Notes to the Financial Statements cont’d
     For The Period Ended 31 December 2009




                                                                           The Group                            The Bank
                                                            31 December                30 June   31 December               30 June
                                                                   2009                  2009           2009                 2009
                                                               N’million           N’million        N’million          N’million


     b.   Directors
          Remuneration paid to the Group's directors was:
          Fees and sitting allowances                                16                    32             13                   25
          Executive compensation                                     69                   114             58                   92
          Other director expenses and benefits                       26                    18             26                   18

                                                                    111                   164             97                  135



          Fees and other emoluments disclosed above
          include amounts paid to:
          The chairman                                                3                     3              2                    2

          The highest paid director                                  15                    31             15                   31



          The number of directors who received fees and
          other emoluments (excluding pension contributions)
          in the following ranges was:

                                                                Number                 Number        Number                Number
          Below N1,000,000                                            -                     -              -                    -
          N1,000,000    -  N2,000,000                                21                    21              8                    8
          N2,000,001    -  N3,000,000                                 -                     -              -                    -
          N5,500,001    -  and above                                  -                     -              -                    -

                                                                     21                    21              8                    8




76    Annual Report and Accounts December 2009
                                                        Notes to the Financial Statements cont’d
                                                                                           For The Period Ended 31 December 2009




                                                                   The Group                                      The Bank
                                                    31 December                30 June         31 December                        30 June
                                                           2009                  2009                 2009                          2009
                                                       N’million          N’million                  N’million                N’million


32. Cash generated from operations
   Reconciliation of profit before tax to
   cash generated from operations:

   Profit before tax                                      2,054                  3,815                   1,880                      4,614
   Provision for loan loss                                2,502                15,295                    2,129                    16,284
   Provision for leases (write-back)                       (211)                   236                    (211)                       236
   Interest in suspense                                   2,953                  4,236                   2,815                      4,236
   Provision for other assets                               392                  1,181                     437                      1,047
   Other assets written off                                (457)                (1,527)                   (352)                    (1,379)
   Movement in provision for investment                     407                  3,557                     453                      2,331
   (Gain)/loss on disposal of fixed assets                   63                     (87)                    34                         (87)
   (Gain)/loss on disposal of investments
   Depreciation                                           1,328                  1,989                   1,295                      1,915
   Amortisation of intangible assets                         64                    128                      59                        118
   Provisions for retirement benefits obligations

   Operating profit before changes in operating
   assets and liabilities                                 9,095                28,823                    8,539                    29,315



   (Increase)/decrease in operating assets:
   Loans to customers, net of loans in
   acquiree (Note 12)                                    49,170                 (5,297)                 48,871                      (4,920)
   Advances under finance leases                            559                (10,457)                    559                    (10,457)
   Insurance receivables                                    134                      -                     134                           -
   Other assets                                             992                  2,848                   1,409                       1,930

                                                         50,855                (12,906)                 50,973                    (13,447)



   (Decrease)/Increase in operating liabilities:
   Customer deposits, net of deposits in
   acquiree (Note 22)                                   (67,676)               (22,773)                (67,330)                   (23,591)
   Accounts payable and others                           (2,493)                 1,072                  (1,417)                       818

                                                        (70,169)               (21,701)                (68,747)                   (22,773)

   Cash used in operations                              (10,219)                (5,784)                 (9,236)                    (6,905)




                                                                                       Annual Report and Accounts December 2009       77
     Notes to the Financial Statements cont’d
     For The Period Ended 31 December 2009




     33. Earnings per share
          Basic earnings per share (EPS) is calculated by dividing the net profit attributable to shareholders by the weighted average number
          of ordinary shares in issue during the period.

                                                                                The Group                                   The Bank
                                                                31 December               30 June         31 December                   30 June
                                                                       2009                 2009                 2009                     2009
                                                                   N’million             N’million           N’million                 N’million

          Net profit attributable to shareholders (N'million)          1,748                  1,833                1,414                  2,297


                                                                     Number                 Number               Number                 Number
          Number of ordinary shares in issue as at
          period end (millions)                                      28,963                  28,963               28,963                 28,963

          Time weighted average number of ordinary
          shares in issue (millions)                                 28,963                  28,963               28,963                 28,963

          Basic earnings per share (kobo)                                  6                      6                     5                     8



     34. Acquisitions and disposals
          There were no acquisitions and disposals during the period.

     35. Cash and cash equivalents
          For the purposes of the cash flow statement, cash and cash equivalents include cash and non-restricted balances with
          central bank, treasury bills and other eligible bills, operating account balances with other banks, amounts due from other banks
          and short-term government securities.

                                                                               The Group                                    The Bank
                                                                31 December               30 June         31 December                   30 June
                                                                       2009                 2009                 2009                     2009
                                                                   N’million             N’million           N’million                 N’million

          Cash and balances with central bank                        23,733                  25,205               23,732                 25,204
          (less restricted balances)                                    (12)                   (310)                 (12)                  (310)

                                                                     23,721                  24,895               23,720                 24,894
          Treasury bills and eligible bills                         164,092                 161,066              164,092                161,066
          Due from other banks                                       28,434                  45,662               28,574                 45,380

                                                                    216,247                 231,622              216,386                231,340



     36. Compliance with banking regulations
          The bank did not contravene any regulation of the Banks and Other Financial Institutions Act CAP B3 LFN 2004 or relevant
          circulars issued by the Central Bank of Nigeria.

     37. Events after the balance sheet date
          There were no significant post balance sheet events which could have had any material effect on the state of affairs of the
          company as at 31 December 2009 which have not been provided for in these financial statements.

     38. Comparatives
          The financial statements are being presented in line with the format prescribed for all Banks in Nigeria by the Central Bank of Nigeria
          with effect from period ended 31 December, 2009.
          Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current period.




78    Annual Report and Accounts December 2009
                                                                     Financial Risk Analysis
                                                                                               For The Period Ended 31 December 2009




Performing but past due loans
Loans and advances less than 90 days past due are considered performing, unless other information is available to indicate the contrary.
Gross amount of loans and advances by class to customers that were past due but performing were as follows:

                                                                                                         Financial
                                               Retail      Corporate                   SME            Institutions                       Total
                                            N’million       N’million             N’million               N’million                N’million
At 31 December 2009
Past due up to 30 days                        12,001           25,010                    Nil                       Nil                 37,011
Past due 30 - 60 days                         14,010           17,021                    Nil                       Nil                 31,031
Past due 60-90 days                            8,011           12,011                    Nil                       Nil                 20,022

                                              34,022           54,042                      -                        -                  88,064



At 30 June 2009
Past due up to 30 days                         8,012           16,011                    Nil                       Nil                 24,023
Past due 30 - 60 days                         16,013            3,021                    Nil                       Nil                 19,034
Past due 60-90 days                            3,001           12,003                    Nil                       Nil                 15,004

                                              27,026           31,035                      -                        -                  58,061



                                                                                                                         Group
                                                                                                    31 December                        30 June
                                                                                                           2009                          2009
                                                                                                          N’million                N’million
Non-performing loans by Industry
Agriculture                                                                                                      Nil                       Nil
Oil and gas                                                                                                  14,020                    11,011
Capital Market                                                                                                5,501                     3,506
Consumer Credit                                                                                               2,512                     1,758
Manufacturing                                                                                                11,500                    12,011
Mining and Quarrying                                                                                             Nil                       Nil
Mortgage                                                                                                      1,001                        Nil
Real Estate and Construction                                                                                  4,012                     3,003
Finance and Insurance                                                                                            Nil                       Nil
Government                                                                                                       Nil                       Nil
Power                                                                                                            Nil                       Nil
Other Public Utilities                                                                                           Nil                       Nil
Transportation                                                                                                2,002                     2,012
Communication                                                                                                 7,011                     4,003
Education                                                                                                        Nil                       Nil
Others (General Commerce)                                                                                    12,664                    11,105

                                                                                                             60,223                    48,409




                                                                                            Annual Report and Accounts December 2009      79
     Financial Risk Analysis cont’d
     For The Period Ended 31 December 2009




                                                                                                                        Group
                                                                                                      31 December                30 June
                                                                                                             2009                  2009
                                                                                                           N’million            N’million


     Non-performing loans by Geography
     South South                                                                                              2,160                  370
     South West                                                                                              54,293               47,428
     South East                                                                                                 960                  341
     North West                                                                                                 460                   20
     North Central                                                                                            1,980                  160
     North East                                                                                                 370                   90
     Rest of Africa                                                                                              Nil                  Nil

                                                                                                             60,223               48,409



     Concentration of risks of financial assets with credit risk exposure

     a)   Geographical sectors
          The following table breaks down the Group’s main credit exposure at their carrying amounts, as categorised by geographical region
          as of 31 December 2009. For this table, the Group has allocated exposures to regions based on the region of domicile of our
          counterparties.

                                                 Due from        Loans &      Advances under                   Debt
                                                    banks       advances        finance lease           instruments                 Total
                                                 N’million      N’million            N’million             N’million            N’million


          At 31 December 2009
          South South                                  Nil         4,401                   560                  891                5,852
          South West                                   Nil       136,241                15,361               43,302              194,901
          South East                                   Nil         2,211                   341                  241                2,791
          North West                                   Nil         1,170                    Nil                  Nil               1,170
          North Central                                Nil         3,211                 1,681                  410                5,301
          North East                                   Nil           890                    Nil                  Nil                 890

                                                         -       148,124                17,943               44,844              210,905


          At 30 June 2009
          South South                                  Nil         5,140                   470                1,551                7,162
          South West                                   Nil       162,601                16,071               52,792              231,461
          South East                                   Nil         2,211                   561                2,770                5,540
          North West                                   Nil           990                    Nil                 990                9,081
          North Central                                Nil         5,550                   911                6,461               12,920
          North East                                   Nil           621                    Nil                 620                1,240

                                                         -       177,113                18,013               65,184              260,304




80    Annual Report and Accounts December 2009
                                                            Financial Risk Analysis cont’d
                                                                        For The Period Ended 31 December 2009




                              Due from     Loans &    Advances under                 Debt
                                 banks    advances      finance lease         instruments                        Total
                              N’million   N’million         N’million             N’million                N’million


b)   Industry sectors
     At 31 December 2009
     Agriculture                    Nil         51                Nil                    Nil                        51
     Oil and gas                    Nil     22,360                Nil                    Nil                    22,360
     Capital Market                 Nil     12,711                Nil                    Nil                    12,711
     General Commerce               Nil     29,750             6,340                  7,000                     43,090
     Manufacturing                  Nil     17,460             3,711                  2,821                     23,991
     Mining and Quarrying           Nil        331                Nil                    Nil                       331
     Mortgage                       Nil      3,591                Nil                    Nil                     3,591
     Real estate                    Nil     10,120                Nil                    Nil                    10,120
     Construction                   Nil      2,981             1,120                     Nil                     4,100
     Finance and Insurance          Nil      3,410                Nil                 3,451                      6,860
     Government                     Nil      7,420                Nil                    Nil                     7,420
     Power                          Nil      2,500             1,042                     Nil                     3,540
     Other public utilities         Nil        560                Nil                    Nil                       560
     Transportation                 Nil      6,311             4,390                     Nil                    10,700
     Communication                  Nil     28,210             1,340                 31,570                     61,120
     Education                      Nil        360                Nil                    Nil                       360

                                      -    148,126            17,943                 44,842                    210,905



     At 30 June 2009
     Agriculture                    Nil         61                10                     Nil                        71
     Oil and gas                    Nil     29,240                Nil                    Nil                    29,240
     Capital Market                 Nil     20,440                Nil                    Nil                    20,440
     General Commerce               Nil     24,011             3,801                  2,401                     30,213
     Manufacturing                  Nil     15,511               360                 12,000                     27,871
     Mining and Quarrying           Nil         60                Nil                 1,201                      1,261
     Mortgage                       Nil      3,050                Nil                    Nil                     3,050
     Real estate and                Nil         Nil               Nil                    Nil                      0.00
     construction                   Nil     17,840                Nil                    Nil                    17,840
     Finance and Insurance          Nil        150                Nil                50,110                     50,260
     Government                     Nil      1,091             4,681                     Nil                     5,772
     Power                          Nil        320                Nil                    Nil                       320
     Other public utilities         Nil         31                Nil                    Nil                        31
     Transportation                 Nil      6,680             5,071                     Nil                    11,751
     Communication                  Nil     33,450                Nil                28,100                     61,550
     Education                      Nil        681                Nil                    Nil                       681

                                      -    152,616            13,923                 93,812                    260,351




                                                                    Annual Report and Accounts December 2009      81
     Financial Risk Analysis cont’d
     For The Period Ended 31 December 2009




     Analysis by portfolio distribution and risk rating

                                           AAAto AA             A+ to A-         BBB+ to BB-              Below    BB-        Unrated           Total
                                            N’million          N’million                N’million          N’million         N’million       N’million


     At 31 December 2009                      (28,372)               (5,470)             (41,951)             (6,602)        (128,500)       (210,895)

     At 30 June 2009                          (24,032)               (5,059)             (41,491)             (7,562)        (182,190)       (260,334)



     These ratings are based on the Bank's internal risk rating criteria

     Foreign exchange risk
     The Group takes on exposure to the effects of fluctuation in the prevailing foreign currency exchange rates on its financial position and
     cash flows. The Board sets limits on the level of exposure by currency and in aggregate for both overnight and intra-day positions, which
     are monitored daily. The table below summarises the Group’s exposure to foreign currency exchange rate risk at 31 December. Included
     in the table are the Group’s financial instruments at carrying amounts, categorised by currency.


     Concentrations of currency risk : On and Off balance sheet financial instruments

                                                           Naira            Dollar                GBP               Euro        Others          Total
                                                          Million          Million             Million            Million       Million        Million
     At 31 December 2009

     Assets
     Cash and balances with Central banks                 23,720                    -                 -                -             -         23,720
     Treasury bills                                      164,092                    -                 -                -             -        164,092
     Due from other banks                                  4,347               22,039               500            1,675            13         28,574
     Loans and advances to customers                     142,693               18,604                 -                -                      161,297
     Advances under finance lease                         14,400                  701                 -                -                 -     15,101
     Insurance receivables                                    61                    -                 -                -                 -         61
     Investment securities                                 8,653                    -                 -                -                 -      8,653
     Investment in subsidiaries                            1,315                    -                 -                -                 -      1,315
     Other assets                                          6,610                    -                 -                -                 -      6,610
     Property and equipment                               24,630                    -                 -                -                 -     24,630
     Total financial assets                              390,521               41,344               500            1,675            13        434,052


     Liabilities
     Customer deposits                                   266,602               21,224               531              452                      288,808
     Current income tax                                    1,491                    -                 -                -                 -      1,491
     Other liabilities                                    14,132                    -                 -                -                 -     14,132
     Deferred tax liabilities                                  -                    -                 -                -                 -          -
     Retirement benefit obligations                          281                    -                 -                -                 -        281
                                                         282,506           21,224                   531              452                 -    304,712


     Net on-balance sheet
     financial position                                  (108,015)         (20,121)                 31            (1,223)           (13)     (129,340)


     Off balance sheet
     Total financial assets                               44,344               73,041               448            3,327                 -    121,160
     Total financial liabilities                          44,344               73,041               448            3,327                 -    121,160
     Net off-balance sheet financial
     position                                                   -                   -                 -                  -               -           -




82     Annual Report and Accounts December 2009
                                                                                      Financial Risk Analysis cont’d
                                                                                                   For The Period Ended 31 December 2009




Liquidity risk
Liquidity risk is the risk that the Group is unable to meet its payment obligations associated with its financial liabilities when they fall due
and to replace funds when they are withdrawn. The consequence may be the failure to meet obligations to repay depositors and fulfil
commitments to lend.



Liquidity risk management process
The Group’s liquidity management process is primarily the responsibility of the Assets and Liabilities Committee (ALCO). Treasury is the
executory arm of ALCO and its functions include:

a.   Day-to-day funding, managed by monitoring future cash flows to ensure that requirements can be met. This includes replenishment
     of funds as they mature or are borrowed by customers. The Group maintains an active presence in money markets to enable this
     to happen;

b.   Maintaining a portfolio of highly marketable assets that can easily be liquidated as protection against any unforeseen interruption
     to cash flow;

c.   Monitoring balance sheet liquidity ratios against internal and regulatory requirements (in conjunction with financial control unit);
     and

d.   Managing the concentration and profile of debt maturities.



Funding approach
Sources of liquidity are regularly reviewed by Treasury to maintain a wide diversification by currency, geography, provider, product and
term.




                                                                                                 Annual Report and Accounts December 2009   83
     Financial Risk Analysis cont’d
     For The Period Ended 31 December 2009




     Maturity profile: On Balance Sheet


     31 December 2009                             Up to 1      1 – 3       3 – 6       6 -12        1 – 5      Over 5
                                                   month      months      months      months        years       years       Total
                                                 N'million   N'million   N'million   N'million   N'million   N'million   N'million


     Liabilities:
     Customer deposits                            157,641      92,727      27,792       7,293       3,354            -    288,808
     Current income tax                             1,491           -           -           -           -            -      1,491
     Other liabilities                             14,132           -           -           -           -            -     14,132
     Deferred income tax liabilities                    -           -           -           -           -            -          -
     Retirement benefit obligations                   281           -           -           -           -            -        281

     Total liabilities                            173,545      92,727      27,792       7,293       3,354            -    304,712


     Assets:
     Cash and balances with central banks 23,720                    -           -           -           -           -      23,720
     Treasury bills and other eligible bills 107,444                -      24,953           -      31,695           -     164,092
     Due from other banks                     28,574                -           -           -           -           -      28,574
     Loans and advances to customers          32,057           25,224      31,097      35,469      37,450           -     161,297
     Advances under finance lease                  -                -           -                  15,101           -      15,101
     Insurance receivables                         -                -          61            -          -           -          61
     Investment securities                         -                -           -            -      8,653           -       8,653
     Investment in subsidiaries                    -                -           -            -          -       1,315       1,315
     Other assets                                  -                -       6,610            -          -           -       6,610
     Property and equipment                        -                -           -            -     24,630           -      24,630

     Total assets                                 191,795      25,224      62,721      35,469     117,529       1,315     434,052

     Gap                                           18,250     (67,503)     34,929      28,176     114,175       1,315     129,340




84    Annual Report and Accounts December 2009
                                                                              Financial Risk Analysis cont’d
                                                                                          For The Period Ended 31 December 2009




Maturity profile: On Balance Sheet


30 June 2009                               Up to 1      1 – 3       3 – 6       6 -12           1 – 5          Over 5
                                            month      months      months      months           years           years              Total
                                          N'million   N'million   N'million   N'million     N'million       N'million        N'million


Liabilities:
Customer deposits                          234,867      53,283      66,509       1,422             55                            356,137
Current income tax                           2,442           -           -           -              -                  -           2,442
Dividend payable                                 -           -           -           -              -                  -               -
Other liabilities                           15,874           -           -           -              -                  -          15,874
Deferred income tax liabilities                336           -           -           -              -                  -             336
Retirement benefit obligations                   -           -           -           -              -                  -               -

Total liabilities (contractual dates)      253,520      53,283      66,509       1,422             55                  -         374,790


Assets:
Cash and balances with central bank         24,894           -           -           -             -                -             24,894
Treasury bills and other eligible bills    161,066           -           -           -             -                -            161,066
Due from other banks                        45,380           -           -           -             -                -             45,380
Loans and advances to customers             74,993      60,136      34,035      15,957        29,990                -            215,112
Advances under finance lease                     -           -       1,679       2,651        11,119                -             15,449
Insurance recievable                             -           -         195           -             -                -                195
Investment securities                            -           -           -           -             -            8,951              8,951
Investment in subsidiaries                       -           -           -           -             -            1,486              1,486
Other assets                                 8,104           -           -           -             -                -              8,104
Property and equipment                           -           -           -           -         6,004           17,522             23,526

Total assets (expected dates)              314,437      60,136      35,909      18,608        47,113            27,959           504,164

Gap                                         60,917       6,853     (30,600)     17,186        47,058            27,959           129,374




                                                                                      Annual Report and Accounts December 2009      85
     Financial Risk Analysis cont’d
     For The Period Ended 31 December 2009




     Maturity profile – Off Balance Sheet

     (a) Financial guarantees and other financial facilities
         Performance Bonds and financial guarantees (Note 29), are also included below based on the earliest contractual maturity date.

     (b) Contingent letters of credits
         Unfunded letters of credit (Note 29) are also included below based on the earliest contractual payment date.

     (c)   Capital commitments
           Capital commitments for the acquisition of buildings and equipment are summarised in the table below.

                                                  Up to 1      1 – 3       3 – 6        6 -12         1 – 5          Over 5
                                                   month      months      months       months         years           years       Total
                                                 N'million   N'million   N'million   N'million    N'million        N'million   N'million


           31 December 2009
           Performance bonds and financial
           guarantees                               1,678      17,669      50,664       10,286        4,110           6,937      91,344
           Contingent Letters of credits              238      19,809       6,953        1,388        1,428               -      29,816
           Bankers acceptances                          -           -           -            -            -               -           -
           Guaranteed commercial papers                 -           -           -            -            -               -           -
           Capital commitments                          -          97         531            -            -               -         628
           Operating lease commitments                  -           -           -            -            -               -           -

                                                    1,916      37,575      58,148       11,674        5,538           6,937     121,788


           30 June 2009
           Performance bonds and
           financial guarantees                     7,919       2,281       2,679        9,349       13,077             853      36,158
           Contingent Letters of credits            1,059      10,614      11,212            -            -               -      22,885
           Bankers acceptances                          -           -           -            -            -               -           -
           Guaranteed commercial papers                 -           -           -            -            -               -           -
           Capital commitments                        653         965                                                             1,618
           Operating lease commitments                  -           -            -            -            -               -          -

                                                    9,631      13,860      13,891        9,349       13,077             853      60,661




86    Annual Report and Accounts December 2009
                                                                                     Financial Risk Analysis cont’d
                                                                                                  For The Period Ended 31 December 2009




Capital management

The Group’s objectives when managing capital, which is a broader concept than the ‘equity’ on the face of balance sheets, are:

a.   To comply with the capital requirements set by the regulators of the banking markets where the entities within the Group operate;

b.   To safeguard the Group’s ability to continue as a going concern so that it can continue to provide returns for shareholders and
     benefits for other stakeholders; and

c.   To maintain a strong capital base to support the development of its business.

Capital adequacy and the use of regulatory capital are monitored daily by the Group’s management, employing techniques based on the
guidelines developed by the Central Bank of Nigeria (CBN), for supervisory purposes. The required information is filed with the CBN on
a monthly basis. Auditors to the Group are also required to render an annual certificate to the Nigerian Deposit Insurance Corporation
(NDIC) that includes the computed capital adequacy ratio of the Group.

The CBN requires each bank to:
(a) hold the minimum level of the regulatory capital of N25 billion and
(b) maintain a ratio of total regulatory capital to the risk-weighted asset at or above the minimum of 10%.

The Group’s regulatory capital as managed by its Financial Control and Treasury Units is made up of tier one capital as follows:
i.   Tier 1 capital: share capital, retained earnings , reserves created by appropriations of retained earnings and capital reserve arising on
     consolidation.

Investments in unconsolidated subsidiaries and associates are deducted from Tier 1 capital to arrive at the regulatory capital.

The risk-weighted assets are measured by means of a hierarchy of five risk weights classified according to the nature of – and reflecting
an estimate of credit, market and other risks associated with each asset and counterparty, taking into account any eligible collateral or
guarantees. A similar treatment is adopted for off-balance sheet exposure, with some adjustments to reflect the more contingent nature
of the potential losses.




                                                                                                Annual Report and Accounts December 2009   87
     Financial Risk Analysis cont’d
     For The Period Ended 31 December 2009




     The table below summarises the composition of regulatory capital and the ratios of the Group for the years ended 31 December. During
     those two years, the individual entities within the Group and the Group complied with all of the externally imposed capital requirements
     to which they are subject.

                                                                                                                          Group
                                                                                                        31 December                30 June
                                                                                                               2009                  2009
                                                                                                            N’million             N’million


     Tier 1 capital
     Share capital                                                                                             14,481               14,481
     Share premium                                                                                            101,272              101,272
     Statutory reserves                                                                                         8,707                8,283
     Contingency reserve                                                                                            -                    -
     SMIEIS reserve                                                                                               764                  764
     Capital Reserve                                                                                            1,915                1,867
     Retained earnings                                                                                          3,552                2,752

     Total qualifying Tier 1 capital                                                                          130,691              129,419


     Tier 2 capital
     Preference shares
     Minority interest                                                                                             (99)                287
     Convertible bonds                                                                                               -                   -
     Revaluation reserve - fixed assets                                                                              -                   -
     Revaluation reserve - investment securities                                                                     -                   -
     Translation reserve                                                                                             -                   -
     General provision                                                                                               -                   -

     Total qualifying Tier 2 capital                                                                               (99)                287

     Total regulatory capital                                                                                 130,592              129,706


     Risk-weighted assets:
     On-balance sheet                                                                                               -                    -
     Off-balance sheet                                                                                        121,160               59,043

     Total risk-weighted assets                                                                               298,323              406,611

     Risk weighted Capital Adequacy Ratio (CAR)                                                                     44%                32%




88    Annual Report and Accounts December 2009
                           Statement of Value Added - Group
                                                                                            For The Period Ended 31 December 2009




                                                              6 months to                              12 months to
                                                             31 December                                   30 June
                                                                    2009                                      2009
                                                                   N’million           %                     N’million               %


Gross income                                                         34,716                                     72,274
Interest paid                                                       (12,363)                                  (18,018)

                                                                     22,353                                     54,255

Administrative overheads
- Local                                                              (4,850)                                    (9,212)
- Foreign                                                              (422)                                      (801)

Value added                                                          17,081           100                       44,242              100


Distribution:

Employees
Salaries and benefits                                                 8,902            52                       14,431              33

Government
- Taxation                                                              811             5                         3,433               8
- IT levy                                                                19             -                            47               -



The future
- Deferred taxation                                                     333             2                       (1,096)              (2)
- Asset replacement (depreciation)                                    1,392             8                        2,117                5
- Asset replacement (provision for losses)                            3,876            23                       23,477              53
- Expansion (transfers to reserves and non-controlling interest)      1,748            10                        1,833                3

                                                                     17,081           100                       44,242              100




Value added represents the additional wealth the group has been able to create by its own and its employees' efforts. This statement
shows the allocation of the wealth among the employees, shareholders, government and the portion re-invested for creation of more
wealth.




                                                                                         Annual Report and Accounts December 2009   89
     Statement of Value Added - Bank
     For The Period Ended 31 December 2009




                                                                 6 months to                              12 months to
                                                                31 December                                    30 June
                                                                       2009                                      2009
                                                                    N’million               %                 N’million              %


     Gross income                                                      33,894                                     70,597
     Interest paid                                                    (12,403)                                  (17,318)

                                                                       21,491                                    53,279



     Administrative overheads
     - Local                                                            (3,793)                                  (1,131)
     - Foreign                                                            (330)                                     (98)

     Value added                                                       17,368              100                   52,050             100



     Distribution

     Employees
     Salaries and benefits                                              8,489               49                   14,018              27

     Providers of funds
     Dividend paid during the period                                    1,448                8                    8,689              17

     Government
     - Taxation                                                           783                5                    3,360               6
     - IT levy                                                             19                -                       46               -

     The future
     - Deferred taxation                                                  336                2                   (1,089)              (2)
     - Asset replacement (depreciation)                                 1,354                8                    2,033                4
     - Asset replacement (provision for losses)                         3,525               20                   22,696              44
     - Expansion (transfers to reserves)                                1,414                8                    2,297                4

                                                                       17,368              100                   52,050             100




     Value added represents the additional wealth the group has been able to create by its own and its employees' efforts. This statement
     shows the allocation of the wealth among the employees, shareholders, government and the portion re-invested for creation of more
     wealth.




90    Annual Report and Accounts December 2009
                             Group Five-Year Financial Summary
                                                                                              For The Period Ended 31 December 2009




                                                              31 December                             30 June
                                                    2009                2009               2008                  2007                 2006
                                                 N’million           N’million          N’million             N’million            N’million
Balance Sheet

Assets:
Cash and balances with Central Bank                23,721               24,895            30,904                 19,734                 12,225
Treasury bills and other eligible bills           164,092              161,066           178,660                 70,954                 25,285
Due from other banks                               28,434               45,662            55,463                 35,661                 34,780
Loans and advances to customers                   160,297              214,922           229,156                 70,318                 38,863
Advances under finance lease                       15,101               15,449             5,228                  1,373                    252
Insurance receivables                                  61                  195                 -                      -                      -
Investment securities                              11,018               11,258             7,178                  3,331                  1,408
Other assets                                        7,977                8,903            11,599                  9,690                  3,219
Intangible assets                                     320                  384               473                      -                      -
Property and equipment                             24,645               23,535            16,817                  7,270                  5,053
Equipment on lease                                      -                    -                 -                      -                      3
                                                  435,666              506,267           535,480               218,332                 121,089


Financed by:
Share capital                                      14,481               14,481            14,481                 8,232                   8,232
Share premium account                             101,272              101,272           101,371                11,178                  11,178
Retained earnings                                   8,707                8,283            10,296                 3,675                     486
Statutory reserves                                  3,552                2,752             7,593                 3,698                   2,450
Small scale industries reserve                        764                  764               764                   764                     764
Capital reserve                                     1,915                1,867             1,867                 2,554                   2,554
Non-controlling interest                               (99)                287               837                   413                     177
Customer deposits                                 288,096              355,770           378,543               176,416                  81,946
Current income tax                                  1,565                2,551             2,801                   584                     902
Other liabilities                                  14,112               17,615            16,926                10,818                  12,400
Deferred income tax liabilities                          3                 336                 -                     -                       -
Retirement benefit obligations                      1,298                  288                 -                     -                       -

                                                  435,666              506,267           535,480               218,332                 121,089

Acceptances and guarantees                        121,160               59,043            49,259                 58,272                 38,441

Operating income                                    22,088              54,256             34,735                24,859                 11,931
Operating expenses                                 (16,158)            (26,964)           (16,654)              (19,748)                (8,258)
Diminution in asset values                           (3,876)           (23,477)            (1,774)                    -                      -

Profit on ordinary activities before taxation        2,054                3,815           16,307                  5,111                  3,673
Taxation                                              (497)              (2,385)           (2,950)                 (397)                  (454)

Profit after taxation                                1,557               1,430            13,357                  4,714                  3,219
Non - controlling Interest                             191                 403              (206)                     -                      -

Profit attributable to the group                     1,748               1,833            13,151                  4,714                  3,219


Earnings per share (basic)                                6                   6                 46                    29                    20
Net assets per share                                      5                   4                  5                     2                     2

Note:
The earnings and dividend per share have been computed on the basis of the profit after tax and the number of issued shares as at period
end. Net assets per share have been computed on the number of issued shares at period end.




                                                                                            Annual Report and Accounts December 2009       91
     Bank Five-year Financial Summary
     For The Period Ended 31 December 2009




                                                                   31 December                            30 June
                                                         2009                2009               2008               2007             2006
                                                      N’million           N’million          N’million          N’million        N’million
     Balance Sheet

     Assets:
     Cash and balances with Central Bank                23,720               24,894            30,902               19,734          12,175
     Treasury bills and other eligible bills           164,092              161,066           178,660               70,954          25,285
     Due from other banks                               28,574               45,380            55,463               35,668          34,835
     Loans and advances to customers                   161,297              215,112           230,713               70,238          38,661
     Advances under finance lease                       15,101               15,449             5,228                1,373             252
     Insurance receivables                                  61                  195                 -                    -               -
     Investment securities                               8,654                8,952             5,014                3,095           1,377
     Investment in associates                              815                  986                 -                    -               -
     Other assets                                        7,108                8,604            10,247                9,087           2,587
     Intangible assets                                     295                  354               473                    -               -
     Property and equipment                             24,335               23,173            16,422                6,995           4,815

                                                       434,052              504,164           533,122            217,144           119,986


     Financed by:
     Share capital                                      14,481               14,481            14,481              8,232             8,232
     Share premium account                             101,272              101,272           101,370             11,178            11,178
     Retained earnings                                   2,249                2,707             9,788              3,331               419
     Statutory reserves                                  8,707                8,283             7,593              3,698             2,450
     Small scale industries reserve                        764                  764               764                764               764
     Capital reserve                                     1,867                1,867             1,867              2,554             2,554
     Customer deposits                                 288,808              356,137           379,729            176,681            81,593
     Current income tax                                  1,491                2,488             2,651                391               855
     Other liabilities                                  13,115               15,541            14,879             10,316            11,941
     Deferred income tax liabilities                         -                  336                 -                  -                 -
     Retirement benefit obligations                      1,298                  288                 -                  -                 -

                                                       434,052              504,164           533,122            217,144           119,986

     Acceptances and guarantees                        121,160               59,043            49,259               58,272          38,441

     Gross earnings                                      33,894              70,597            40,474               23,630          11,572

     Profit on ordinary activities before taxation        1,880                4,614           15,796                4,403           3,587
     Taxation                                              (466)              (2,317)          (2,809)                (243)           (425)

     Profit after taxation                                1,414               2,297            12,987                4,160           3,162


     Earnings per share (basic)                                5                   8                45                 25                19
     Net assets per share                                      4                   4                 5                  2                 2

     Note:
     The earnings and dividend per share have been computed on the basis of the profit after tax and the number of issued shares as at period
     end. Net assets per share have been computed on the number of issued shares at period end.




92    Annual Report and Accounts December 2009
                                                             Proxy Form

                       TWENTY SECOND ANNUAL GENERAL MEETING TO BE HELD AT THE CONGRESS HALL,
                 TRANSCORP HILTON HOTEL, ABUJA ON THURSDAY, THE 29TH DAY OF JULY, 2010 AT 11.00 A. M.

      I/We………………………………………………………...of………………………………………………………… being a shareholder of Fidelity
      Bank Plc. hereby appoint…………………………………………………………… or failing him Chief Christopher I. Ezeh or failing him Mr.
      Reginald Ihejiahi as my/our Proxy to act and vote for me/us on my/our behalf at the 22nd Annual General Meeting to be held on Thursday, July
      29, 2010 and at any adjournment thereof.

      DATED THE ……….… DAY OF… ………...2010.

      SHAREHOLDER’S SIGNATURE………………………………………………………..


                                      NO.                     ORDINARY BUSINESS                                            FOR              AGAINST
                                      1. To receive the Statement of Accounts for the period ended December
 I/We desire this proxy to be
                                          31, 2009 together with the Directors' and Auditors' Reports thereon
 used in favour of/or against         2. To declare a dividend.
 the resolution as indicated          3. To elect/re-elect Directors.
 alongside (strike out                4. To approve the remuneration of Directors.
 whichever is not required).          5. To authorize the Directors to fix the remuneration of the Auditors.
                                      6. To elect the members of the Audit Committee.

Please indicate with an "X" in the appropriate column, how you wish your votes to be cast on the resolutions set out above. Unless otherwise
instructed, the Proxy will vote or abstain from voting at his discretion.

    This proxy form should NOT be completed and sent to the registered office if the member will be attending the meeting.

    NOTE:
    (i)   A member (shareholder) entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy in his stead. All proxy forms should
          be deposited at the registered office of the Registrar (as in notice) not later than 48 hours before the meeting.
    (ii) In the case of Joint Shareholders, any of them may complete the form, but the names of all Joint Shareholders must be stated.
    (iii) If the shareholder is a Corporation, this form must be executed under its Common Seal or under the hand of some officers or an attorney duly
          authorised.
    (iv) The Proxy must produce the Admission Card sent with the Notice of the meeting to gain entrance to the meeting.
    (v) It is a legal requirement that all instruments of proxy to be used for the purpose of voting by any person entitled to vote at any meeting of
          shareholders must bear appropriate stamp duty from the Stamp Duties office (not adhesive postage stamps).




                                                       Admission Card
                                       TWENTY SECOND ANNUAL GENERAL MEETING TO BE HELD AT
               THE CONGRESS HALL, TRANSCORP HILTON HOTEL, ABUJA ON THURSDAY, THE 29TH DAY OF JULY, 2010 AT 11.00 A. M.


NAME OF SHAREHOLDER:


NUMBER OF SHARES HELD:


Please admit …………………………………………………………………… to the 22nd Annual General Meeting of Fidelity Bank Plc.

Signature of person attending:……………………………………………………………...
*         This admission card should be produced by the Shareholder or his proxy in order to gain entrance to the Annual General Meeting.
*         You are requested to sign this card at the entrance in the presence of the Company Secretary or her Nominee on the day of the Annual General
          Meeting.
Please be advised that to enable a Proxy gain entrance to the meeting, the Proxy Form is to be duly completed and delivered to the Bank not later than
48 hours before the time fixed for the meeting.


                                                                   COMPANY SECRETARY

				
DOCUMENT INFO