Jaiz Bank Gets Haircut after Earnings Forecast
Jaiz Bank Plc’s market valuation slumped by about 12% in the last seven trading sessions after the non-interest lender posted its earnings forecast for the third quarter of the year on the Nigerian Exchange (NGX).
Reactions have been mixed as investors sold off in the last three days consecutively despite bullish momentum.
Consequently, the Islamic lender’s valuation made a reverse as some equities investors started to exit their positions after its earnings forecast for the third quarter of 2023 was posted.
According to the record, Jaiz Bank Plc had on 13 June 2023 told the Nigerian Exchange and local investors in the market that its third quarter of financial year profit will print at N2.163 billion, expecting its performance to improve.
In the first quarter, the bank recorded N1.593 billion as a profit on gross income of N9.434 billion. Following the earnings forecast, its share gained for the first three days and slumped for the rest.
For the period, Jaiz Bank Plc estimated a negative net cash flow of about N3.6 billion from its operating activities. The Islamic lender revealed its expectation to drive gross earnings to N12.003 billion in the same period.
Suggesting pressure on asset quality, Jaiz Bank Plc estimate N1 billion as its credit impairment charge in the first quarter versus the size of loans. However, the non-interest banking lender expects net revenue from its fund to contribute N9.267 billion to its operating income.
Its record also shows that operating expenses are expected to print at N6.278 billion, thus reducing the expected profitability size.
Despite stock rallies, Jaiz Bank shares have been trading against the wave, declining by about 12% in the last seven trading sessions from N1.60 per share after the earnings forecast was posted to N1.43 on Thursday.
Yesterday, 10.819 million of Jaiz Bank exchange hands at N15.472 million. On Wednesday, 20.447 million were traded when the price fell to N1.53. On Monday, about 140 million of the Islamic bank’s shares exchanged hands.
Jaiz Bank has six key insiders that own 67.87% of its outstanding shares. The bank’s largest single shareholder, Dr.Muhammadu Indimi, controls 24.06% of the entire shareholding structure. Dantata Investment & Securities Limited owns 11.65%, Dr. Umaru Abdul Mutallab controls 10.13% and Altani Investment Limited owns 7.53%.
Others are Islamic Development Bank (7.26%) and Dangote Industries Ltd (7.24%). These shareholders have loan exposure to Jaiz Bank plc, some are performing and a loan to Nobel Hall Limited is already in a doubtful category, according to its results.
The Islamic lender has 34.541 billion outstanding shares as of the first quarter of 2023. #Jaiz Bank Gets Haircut after Earnings Forecast