Nigeria's Big Banks Valuation Jumps to N3.5trn
Zenith Bank

Nigeria’s Big Banks Valuation Jumps to N3.5trn

Nigeria’s top five banks’ combined market valuation has increased to about N3.50 trillion, driven by investors positioning in financial services brands with dividend payment track records and solid market fundamentals.

According to stock market screener data, the trajectory represents a significant jump as MarketForces Africa had reported a market valuation of the Tier-1 capital bank below N2.5 trillion in the year.

These local lenders reported spikes in top line amidst headwinds, their separate audited reports showed and scaled through the hurdle of earnings pressures in the first quarter despite pressure from the naira crisis.

In the equities market, sentiment has also improved. Trading data show that the year-to-date performance of Tier-1 banks (FBNH, UBA, GTCO, ACCESS, Zenith -FUGAZ) also improved as the banking index spikes.

Ahead of the second quarter earnings release, aTier-1 banks with strong net FX positions are expected to boost their earnings with revaluation gains following the monetary authority’s decision to float the naira.

At about 75%. Access Holdings Plc’s year-to-date return ranked higher in the tier-1 capital stock market performance, according to data screened by analysts. The stock was followed by FBNH with more than 62% year-to-date return.

In the just concluded week, Zenith Bank was among the most popular banking stocks that rallied, recording more than a 3% gain in the last five trading sessions on the local bourse.

The Nigerian most profitable lender saw its valuation jump to about 1.005 trillion, maintaining its leading brand identity in the banking sector. Its share price settled at N32 following healthy earnings growth in the first quarter of 2023.

There is so much to like about the Ajose Adeogun-based financial services behemoth. This includes sustained year-on-year growth in profitability. Equities analysts said strong earnings performance over the year has helped the bank deliver its dividend policy. Zenith Bank remains most valuable in the local bourse with a strong buying rating.

Traded at N31.45 per share, GTCO Plc valuation comes close after falling from the top, now ranked second most valuable in the banking sector category. The financial service holding company was priced at about N926 billion on 29.43 billion outstanding shares in the market.

Following a fast and furious bargain hunting, FBNH worth about N621 billion, sold at N17.30 per share in the Nigerian bourse.
However, the financial holding company is less valuable than Stanbic IBTC – a tier 2 lender in the industry.

Selling at N44 as of Friday close, Tier-2 bank, Stanbic IBTC worth N671 billion. Access Holdings, the largest financial services by total asset has also seen its market valuation increase amidst stock market rallies.

At N14.95 per share, the market valuation of Access Holdings Plc was lower at N531 billion as of Friday’s close versus peers’ valuation. With the positive in the market, UBA’s valuation also jumped, though the Pan Africa lender remains the smallest in the Tier-1 category at about N392 billion. The bank share was priced at N11.45 on Friday.

Weekly stock market performance

Zenith Bank gained 3.125% in the just concluded week, while GTCO shares closed with 2.7777% share price appreciation in the last five days of trading sessions. FBHN’s share also jumped 9.5% amidst underwhelming earnings performance in 2022.

Meanwhile, according to market data, Access Holdings’ share price gathered momentum with a 4.91% weekly gain. Trailing Access share uptick, UBA pushed higher with a 3.15% increase in its market valuation. #Nigeria’s Big Banks Valuation Jumps to N3.5trn Nigerian Treasury Bills Yield Rises to 7%

Download: MarketForces Africa FinancialNews E-copy Here