Nigerian Big Banks Trade Cheaper after Q3 Earnings Miss
Nigerian big banks are trading cheaper following an unimpressive earnings performance in the third quarter of the financial year. All the banks except United Bank for Africa posted year-on-year growth.
Profitability reduced basically as a result of asset quality challenges that triggered higher impairment charges on expected credit losses and a rising cost profile.
Net interest margin thinned out and analysts anticipate that pressures on interest earnings asset will persist, and be more visible in the coming quarters at the Central Bank begin to cut rate successively.
With requirement that banks under regulatory forbearance will not be allowed to pay dividend, the Tier-1 banks swept to actions, and this resulted in increase in provisioning.
Some legacy loan assets stained the earnings performance but the road appears to have cleared and perhaps forbearance issue will no longer be a market concern in the latter part of the year.
Will banks make as much as they used to? Most of the Broadstreet analysts that spoke with MarketForces Africa said no, citing disinflation, interest rate cut and firmer local currency.
“The fact that the Central Bank of Nigeria is in the mood to cut rate for economy to expand means banks will have lower net margins. Competition will hit bottom line and lower FX gains will have effects on performance.”
In the stock market, UBA share price has declined to N41 from a peak of N50.55 in the last 52 weeks with the market value printing at N1.682 trillion.
Zenith Bank’s share price has dropped to N59.90 in the equity market from a 52-week high of N78.5 on the Nigerian Exchange, according to stock data tracked by MarketForces Africa, with a market value of N2.460 trillion early on Friday.
Access Holdings PLC is priced at N22.50 in the local bourse, down from its highest value of N28.90 in 12 months – with a market capitalisation of N1.19 trillion.
GTCO has fallen sharply from its 52 week high of N103.2 after unimpressive earnings performance in 2025. The stock is priced at N85.5, a significant discount to its highest value in the last 1 year. The market value of GTCO has dropped to N3.1 trillion due to sell pressure that greeted its downbeat earnings.
First Holdco is down to N31.50, from 52-week high of N37.50, one of the most volatile banking names. The market value of First Holdco hovered at N1.319 trillion. Fidelity Bank: Analysts See 84% Upside on New Target Price
