ABUJA: Nigeria's Fidelity Bank plans to issue up to 50 billion naira ($131.3 million) in local bonds by the fourth quarter to refinance existing debt as yields fall, a senior executive said on Tuesday.

Bond yields have declined on the local debt market after an oil price crash triggered by the novel coronavirus pandemic caused foreign investors to dump naira assets, leaving money markets awash with liquidity.

The new issue will be made to redeem an existing 30 billion naira bond issued at 16.48%, Chief Operations and Information Officer Gbolahan Joshua told an analyst call.

Debt market yields have dropped from a high of 18% three years ago. Yields on the one-year treasury bill are quoted under 5%.

The mid-tier lender has said it expects to see a 15% drop in profit this year compared with 2019, citing the impact of the coronavirus pandemic.

It said profit before tax had increased by 21.9% to 12 billion naira in the half year.

Fidelity said income declined in the second quarter due to a downward review of lending rates on loans backed by development finance institutions and an economic slowdown.

Nigeria's growth contracted in the second quarter with fears that the economy could be heading into a recession in the next quarter.