Fidelity Bank Plc, a tier-2 Nigerian commercial bank, has dropped out of the elite ₦1 trillion market capitalisation club, following a sharp decline in its share price triggered by a Supreme Court ruling.
As of market close on Tuesday, May 20, 2025, the bank’s market capitalisation fell to ₦954 billion, after its share price slipped by 5% to ₦19.00 from ₦20.00 the previous day, according to data from the Nigerian Exchange Limited (NGX).
The drop came after the Supreme Court ordered Fidelity to pay ₦225 billion ($140.6 million) in damages to Sagecom Concept Limited. The judgment, tied to a long-standing dispute involving the defunct FSB International Bank—which Fidelity acquired—spooked investors despite immediate reassurances from both the bank and the Central Bank of Nigeria (CBN).
This marks the second time in May, the lender has lost its trillion-naira status, although this time the trigger was not market sentiment or profit-taking, but regulatory and legal uncertainty.
“The decline in share price is most likely from the initial reactions to the Supreme Court fine news,” said Nathanael Disu, investment research analyst at Afrinvest West Africa Limited.
He noted that legal overhangs like this tend to cloud valuation, especially in a retail-driven market: “The bank’s share price might possibly pick up tomorrow because its financial performance still remains strong.”
Fidelity had surged into the trillion-naira club and valuation tier on April 4, becoming the only tier-2 Nigerian bank to join the ranks of tier-1 giants like Zenith Bank, Guaranty Trust Holding Company (GTCO), Access Holdings, First Bank HoldCo, and United Bank for Africa (UBA). With its exit, only five banks remain in that category.
In a statement, the bank said that the Supreme Court judgment relates to a legacy transaction and does not reflect the bank’s current financial position. The bank also noted that it is pursuing judicial clarification, stating the actual payable amount may be closer to ₦14 billion ($8.7 million).
The CBN also dismissed media reports of bankruptcy, saying “the Nigerian banking sector remains resilient, safe, and sound.”
The timing of the court’s decision is significant as Fidelity recently reported a 190% year-on-year increase in after-tax profit for Q1 2025, reaching ₦91 billion ($56.8 million). The strong performance helped drive investor confidence and justified its earlier ascent into the trillion-naira club.
The bank is also in the middle of its recapitalisation drive, as mandated by the CBN’s ₦500 billion ($311.9 million) minimum capital requirement. Analysts previously expressed confidence that the bank could meet this target through equity raises, citing its 237% oversubscribed capital offering in 2024 and strong retail investor support.
Despite a share price dip, Fidelity remains one of the most active stocks on the NGX. According to African Stock Exchanges, a real-time market data platform, Fidelity is the second most traded stock between February 14 and May 20, 2025, with 2.5 billion shares exchanged in over 31,000 deals valued at ₦47.8 billion ($29.9 million).
Fidelity Bank’s brief departure from the trillion-naira club may prove temporary, but it underscores how swiftly legal and regulatory developments can reshape investor perceptions, even for banks with strong earnings and strong ambition.
*This is a developing story
