(Bloomberg) -- Fidelity Bank Plc of Nigeria plans to boost investment in technology as a way of cutting costs and increasing profit over the next three to four years.

The Lagos-based lender already hiked spending on digitization by more than 40 percent this year, and plans to increase its outlay further still, Chief Operations Officer Gbolahan Joshua said in an interview in the West African nation’s commercial hub.

Technology will allow the bank to “increase market share and improve operational efficiency,” Joshua said. That will help deliver a return-on-equity of more than 20 percent by 2022, up from a target for this year of 12.5 percent, he said.

Banks and other companies are increasingly tapping into Nigeria’s digital potential as the economy recovers. Mobile-phone subscribers in the nation of almost 200 million people reached 162 million in September, according to the Nigerian Communication Commission.

Greater use of technology will bring the bank’s cost-to-income ratio below 60 percent, from around 68 percent currently, Joshua said. Fidelity already spent 3 billion naira ($8.3 million) on digitizing its processes in the nine months through September, 43 percent up from a year earlier, he said.

New Products

Fidelity is looking to expand its customer-service infrastructure and agency banking, as well as to launch new digital products, according to Joshua. About 40 percent of customers subscribe to its mobile-banking platform, and the bank hopes to grow that to three quarters by 2022.

“That is what will bring the cost-to-income ratio to the 50s level and then take return on equity above 20 percent,” Joshua said.

The lender targets profit before tax growth of about 25 percent this year to 25 billion naira even as it sees a seasonal slowdown in business in the fourth quarter, according to Joshua.

(Updates with 2018 profit forecast in final paragraph.)

To contact the reporter on this story: Emele Onu in Lagos at eonu1@bloomberg.net

To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Paul Armstrong

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