Banking Index Drags by Uncertainties, Unmet Expectations
The banking index pulled back over negative uncertainties over top banks’ earnings outlook. Trading activities in the Nigerian Exchange (NGX) were broadly positive, though financial stocks drove against the trend.
Investors reacted negatively to the recent earnings release by two leading tier-1 lenders, with significant price depreciations across counters, including sell pressures on insurance names.
Zenith Bank, and the United Bank of Africa released their results showing impressive revenue growth, however, net income failed to impress investors, resulting to early takeofffrom the local bourse.
The two banks declared interim dividends, but UBA slashed its proposed payment to shareholders sharply, and Zenith Bank took the other way.
UBA will pay 25 kobo as an interim dividend for the half year performance, down by 87.5% from N2 last year, and Zenith Bank increased its interim dividend offering by 25% to N1.25.
The results showed that Zenith Bank profit fell due to higher impairment booked to exit CBN forbearance, but UBA with Pan-African footprint profitability increased year on year.
Investors exited positions in the two banks, and Zenith Bank Plc’s market value nosedived by 5.88% week on week. UBA lost 9.24% of its opening valuation to sell-offs.
Access Holdings and GTCO are yet to release their earnings scorecard submitted to the regulator for scrutiny. For now, it is only UBA that has been able to grow profit in 12 months. First Holdco Plc posted lower earnings in the first half of 2025.
The market now anticipates earnings release from the Nigeria’s largest bank by total asset with relatively lower stock market valuation and GTCO, the most valuable among tier-1 bank names.
Hence, the Banking index fell by -1.93%, leading the negative performance across sectoral indexes that was broadly bearish. The Insurance sector (-1.27%) posted a similar performance, due to losses in CORNERST (-4.62%) and VERITASKAP (-9.91%).
Selloffs in OANDO (-1.44%) also drove a retraction in the Oil & Gas index (-0.13%), while CUTIX (-4.89%) drove a mild decline in the Industrial Goods Index (-0.01%).
Meanwhile, the Consumer Goods (+0.61%) was the only winner in the session, buoyed by buying interest in NB (+6.37%), while the Commodity Index closed flat.
Overall, the Nigerian Exchange closed higher, gaining N822 billion week on week ahead of rate decision by the monetary policy committee. CBN Injects $150m FX Intervention Sales to Fuel Naira Rally
