Fidelity Bank yesterday dropped its H1 2025 results which were long overview. Investors expecting an interim dividend may be “heartbroken” as the lender will not be paying an interim dividend. 

An interim dividend is one paid before a company’s audited financial numbers. Last year, the bank paid an interim dividend of 20 kobo per share. 

Why isn’t the firm paying an interim dividend?

H1 2025 numbers show the company has negative retained earnings of N74.1 billion. Think of retained earnings as a container where past profits are kept. If that container is empty, there is no way to pay money from it.

As of Q1 2025, the bank had N213 billion in retained earnings. So that is a massive swing. 

Why did the retained earnings turn red? 

Note 35 provides some colour as to why (my understanding of it).

Statutory Reserve Non-controlling Interest Nigerian banking regulations require the Bank to make an annual appropriation to a statutory reserve. As stipulated by S.15(1) of the Banks and Other Financial Institution Act of Nigeria, an appropriation of 30% of profit after tax is made if the statutory reserve is less than paid-up share capital and 15% of profit after tax if the statutory reserve is greater than the paid-up share capital. The Bank made a transfer of N303,475million to statutory reserves during the period ended 30 June 2025 (31 December 2024: N42,431 million) 

Management should provide some additional details when the earnings calls holds.

Expect a slim or no 2025 final dividend 

Q2 2025 profit after tax came in at around N32 billion. Unpaid profit is what goes into the retained earnings. 

At best, the company will end the year with a few tens of billions in retained earnings. At worst, those earnings may remain slightly negative.

If that is the case, the likelihood of the bank paying a final dividend are quite slim. At best, it may pay a token 10 to 20 kobo final dividend. 9M 2025 earnings should provide more colour on this.