Fidelity Bank may face insolvency after Nigeria’s Supreme Court upheld N225 billion in damages over a tort dispute with Sagecom
[dropcap]F[/dropcap]idelity Bank is fighting for survival after Nigeria’s Supreme Court ruled it must pay over N225 billion in damages to Sagecom Concept Ltd, a small Ibadan-based services firm.
Also read: Fidelity Bank’s Dr. Nneka Onyeali-Ikpe honoured in 2024 Most Influential Global Top 100 for Trade and Export
The judgement, which could trigger a major liquidity crisis, stems from a protracted legal battle that began nearly two decades ago.
The five-member Supreme Court panel found Fidelity Bank liable for damages caused when it sold assets it was barred by court order from disposing of.
The unanimous decision, issued on April 11, 2025, concluded years of litigation, which began after Sagecom unknowingly purchased properties tied to a legal dispute between engineering firm G. Cappa Plc and the now-defunct FSB International Bank—later absorbed by Fidelity during the 2005 banking consolidation.
“To be honest, this is the biggest crisis the bank has ever faced,” a senior Fidelity executive admitted during a confidential video call with a popular online news platform.
“The obligation is simply too big.”
The justices were scathing in their judgement. “The notorious principle of equity that a court ought not to allow a person to take advantage of his own wrong still remains part of our jurisprudence,” said Justice Adamu Jauro.
Sagecom’s lawyers, Muiz Banire and Adeyinka Olumide-Fusika, successfully argued that Fidelity’s unlawful sale deprived their client of use and profit from the assets it had purchased in good faith.
The firm had borrowed N350 million from FMCB at a 19.5% interest rate to secure the deal, only to discover a pre-existing court order had blocked the sale.
Justice Jummai Sankey criticised the bank’s “deliberate disregard for the court’s authority,” stressing that parties must obey judicial orders regardless of their views.
The judgement affirmed the June 20, 2011, ruling of the Lagos High Court, which first imposed the damages.
The value of the liability, according to a recent worksheet from Justice Olabisi Akinlade, stands at $139 million or N225.28 billion, using the official rate of N1620 per dollar as of May 15, 2025.
Fidelity is expected to challenge this calculation at a hearing on May 19, though insiders believe the amount will likely stand.
Despite posting a pre-tax profit of N385 billion in 2024; largely from rolled-over loans, sources say the bank’s balance sheet cannot absorb the judgement.
“If the bank is miraculously spared, we would have the altruism of the small business that got this unprecedented judgement to appreciate,” the executive added.
Fidelity Bank, currently led by CEO Nneka Onyeali-Ikpe, has long been criticised for aggressive loan recovery tactics. It is one of Nigeria’s six largest lenders by asset size.
Founded in the early 1980s, the bank was once chaired by opposition leader Peter Obi, who left in 2003 to become Anambra State Governor.
Neither the Central Bank of Nigeria nor the bank’s legal team; including senior advocates Kanu Agabi and Onyechi Ikpeazu, responded to requests for comment.
However, a source within the regulatory space said the CBN might intervene to avert a systemic banking failure.
Also read: Fidelity Bank stock receives “Buy” rating from investment advisory firms
This judgement marks one of the largest tort liabilities ever awarded against a Nigerian financial institution and has sent shockwaves across the banking sector.
Ojelabi, the publisher of Freelanews, is an award winning and professionally trained mass communicator, who writes ruthlessly about pop culture, religion, politics and entertainment.
