FBN Holdings Hits N621bn in Market Valuation
Nnamdi Okonkwo, GMD, FBNH

FBN Holdings Hits N621bn in Market Valuation

Equities investors in the Nigerian Exchange have continued to price FBN Holdings Plc share higher despite the earnings downturn in the financial year 2022. For Ticker: FBNH stock market rerating has been sporadic, and consistent since the beginning of 2023.

With a year-to-date return of over 60%, the group has also signaled it has a strong business capacity to earn more in the first quarter of 2023 with a steep year-on-year rise in profitability.

The elephant is racing towards the big valuation league, stock market movers as its market valuation broke the historical ceiling already and it has not stopped, gaining 9.5% last week to maintain its uptrend.

FBN Holdings is popping higher as the financial stocks continue to gain popularity on the expectation that the banking sector will see improved regulation.

Though the group has a relatively low net fx position that could push earnings higher, it also has below industry peers’ exposures to oil and gas, thus reducing the risk of higher provision for credit losses.

The elephant brand financial services group’s valuation has adjusted positively since its last boardroom game, opening an entry opportunity for Femi Otedola’s single largest shareholding. I

ts market price per share has left the penny stock group; FBNH’s share price could cross N20 per share if the stock keeps the momentum ahead of the second quarter of the financial year 2023 earnings season.

In the audited report, the financial service group earnings slipped, but there were signs of early recovery in the first quarter earnings release with year-on-year solid growth.

The audited report for 2022 showed group earnings printed at N805.13 billion from N757.3 billion in the comparable period in 2021. The group saw its annual profit maneuvering to N136.17 billion, a decline compared to N151.08 billion in 2021.

Inside detail showed that FBNH’s largest shareholder, Femi Otedola, offloaded his direct interest, but the billionaire still maintains his position in terms of overall shareholding.

Data from the local bourse showed that FBNH gained 9.5%% to close at N17.30 per share on Friday. This pushed its market valuation to N621 billion – more than twice the group market value before Otedola’s massive shares ramped up.

Market data obtained from the Nigerian Exchange showed that a total of 9,792,330 shares of FBN Holdings were traded on the floor of the Nigerian Exchange, valued at N169.407 million.

MarketForces Africa’s review indicated that the financial service company’s single largest shareholder Femi Otedola sold a large part of his direct interest in 2022. Despite the sizeable direct equity sales, Otedola still maintained the largest interest for an individual.

The increased market valuation is on nothing but sentiment. What’s fueling investors’ sentiment isn’t clear even though FBN Holdings annual profit slumped in 2022.

The elephant is dancing smoothly and when it crossed N600 billion in market valuation, it would have raised its year-to-date return above average inflation rate – and that’s impressive for value-hunting investors.

In 2021, FBNH achieved a 99.1% jump in pre-tax profits to N166.7 billion, aided by the recovery of bad debt loans from its customers during the period. Based on its recent earnings performance, the elephant has shown it could dance well. #FBN Holdings Hits N621bn in Market Valuation

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