Fidelity Bank Denies Bankruptcy Rumours, Clarifies Court Judgment on Legacy Loan Dispute
Fidelity Bank Plc has issued a formal statement clarifying its position regarding a recent court judgment involving a legacy transaction from the defunct FSB International Bank, which has been the subject of recent media reports, notably a publication by Peoples Gazette. The bank asserts that it is not facing bankruptcy, contrary to claims made in the publication, and emphasizes its strong financial standing.
The issue stems from a 2002 credit facility of USD 3 million extended by FSB to G. Cappa Plc, secured by a mortgage on property in Ikoyi. G. Cappa defaulted on repayment, leading to legal disputes over the property’s sale and possession. A series of court rulings, including a 2018 Lagos High Court judgment, awarded damages to Sagecom Concepts Limited, a company involved in the transaction, against both G. Cappa and Fidelity Bank.
Fidelity Bank explains that the judgment’s ambiguities, particularly regarding the calculation of damages and currency conversions, have complicated the process of settling the liability. Recent legal developments, including a Supreme Court ruling in January 2025, clarified that foreign currency judgment debts should be converted to Naira based on the exchange rate at the date of the trial court’s judgment. Applying this ruling, the bank estimates its potential liability to be around N30.7 billion, payable by G. Cappa.
The bank has filed for court clarification and is seeking to ensure proper computation of the liability while maintaining the status quo, as ordered by the court. Fidelity Bank also condemns the recent publication by Peoples Gazette, which it claims violates court orders and constitutes contempt. The bank states it remains financially robust, with strong capital and positive financial results as of Q1 2025, and is committed to protecting its reputation and stakeholders.
Fidelity Bank announced plans to pursue legal action against those responsible for the false and malicious publication, reaffirming its commitment to transparency and stability.