Nigerian Big Banks See Fast, Furious Decline in Valuations
Equity investors in the Nigerian stock market have priced down shares of top five banks in Nigeria, with combine valuation now less than N2.375 trillion, from more than N2.6 trillion. Read: Nigeria’s Top Banks Valuations Sink as Investors Take Early Exits
Most of the banks has seen their valuations decline after financial year 2021 earnings release. In the last seven trading sessions, banking sector has shed 4.6% of its previous week valuation, majorly driven by price down in mid to large capitalised stocks amidst industry’s rivalry and increased margin-dilutive regulations.
Nigerian bourse had started off the year positvely but dark cloud gathered and red rain fell with myriads of straight up selloff that signal weak investing sentiment.
According to data from the Nigerian bourse, stocks traders reduced their buying interest in March as equity market declined by more than N231 billion in the period despite positive earnings by banks, Telcos and others.
Specifically, investors booked large profit in the banking sector – being one of the most liquid segment in the local bourse.
A number of stockbrokers told MarketForces Africa at the weekend that some of these stocks have been adjusted for dividends payments but largely, trading have been negative.
Zenith bank Plc maintained the most valuable in the banking segment, follows closely by GTCO while FBNH, the third largest on the list is a mile away to the two in terms of valuation.
Last week, the two financial services powerhouses lost 7.1% of their respective market valuations due to selloff. Analysts observed that deposit money banks witnessed unusually high market and regulatory pressures in 2021, saying banks were defending earnings position rather than usual profit growth pursuits.
Grew moderately, Zenith bank Plc defended its profitability, building footprint in the retail segment but GTCO was not as lucky as the industry’s cost leader profit dropped off double-digits – first time in a decade.
Zenith bank market valuation printed at N703.181 billion on Friday, and GTCO was priced at N632.77 billion.
FBNH, the third largest by market valuation in the tier 1 category was valued at N437.923 billion on Friday. In the banking index, Access Bank, the largest in total asset, ranks fourth at N336.77 billion in valuation.
UBA, the least in in term of market valuation, worth N263.33 billion. Apart from Zenith and GTCO, Stanbic IBTC has a higher market valuation than any of the Tier-1 banks.
As of Friday, the equity market placed N442.481 billion on the tier-2 lender with 12.957 billion outstanding shares – more than 67% of which is owned by Stanbic Africa Holdings Limited.
Zenith Bank Chairman Jim Ovia owns more than 11%, the single largest shareholding apart from his indirect interest in the Nigerian financial service behemoth.
For GTCO, Stanbic IBTC Nominees remains the largest institutional investors, holding 19.63% of entire outstanding shares follow at distant by Group Chief Executive Segun Agbaje 32,146,651 shares which is less than 0.11% apart from indirect interest, according to audited financial statement.
Of Access Bank Plc 34.568 billion outstanding shares, the Group Chief Executive Herbert Wigwe owns 201,231,713 shares with 1,316,619,016 indirect interest in the company, according to audited result.
Again, Stanbic Nominees Nigeria limited hold 11.50% of entire outstanding shares as of December, 2021, a decline from 11.98% in the comparable period in 2020.
Last week, Access Bank Plc listed more than 35.545 billion shares at N9.95 on the NASD Over-the-Counter Securities Exchange, valued at N353.674 billion.
Access Bank Plc delisted from the Nigerian Exchange (NGX) on Thursday 24 March 2022 following the Scheme of Arrangement in December 2021. READ: Fitch Sees Two Fed Rate Hikes in 2022, Four in 2023
In UBA, Heirs Holding Limited, a company control by the group Chairman Tony Elumelu owns 194,669,555 in the Pan Africa lender’s outstanding shares valued at NN263.33 billion. Stanbic Nominees Nigeria limited has 5.87% interest.
UBA Chairman also has 2,185,934,184 indirect holding in the group. This comprises 140,843,816 held on behalf of HH Capital limited, 1.814 billion shares for Heirs Holding and 231,086,68 owns by HH Alliance Limited. Nigerian Big Banks See Fast, Furious Valuations Decline
