Tier-1 Banks Market Value Inches to N5.4Trn

The combined market value of Nigeria’s top banks has inched above N5.4 trillion ahead of the fourth quarter of 2023 earnings releases by the big lenders in the economy.

According to data from the Nigerian Exchange, there has been a sustained increase in the market price of these banking stocks.  Stock market analysts said the sharp increase was aided by improved market sentiment ahead of earnings releases.

There is an adjustment in terms of banks’ market value ratings. UBA, ACCESS Plc has displaced FBNH, which is now ranked as the smallest in the Tier-1 banks category.

Opening the year positive, FBNH’s 10% gain drove the banking index higher, supported by about 13% the first week in the new year’s gain recorded by UBA. In addition, Zenith Bank’s popularity among alpha seekers resulted in about 9% price appreciation versus about 5% gain recorded by Access Holdings Plc.

Equities analysts told MarketForces Africa that over the years, Nigerian banks have been underpriced below emerging markets peers; market critics are of the view that the Nigerian Exchange failed to reward performance.

In the third quarter of 2023, the Big 5 local lenders posted higher profits amidst headwinds, their separate audited reports showed. Their earnings were boosted by FX revaluation gains following the naira devaluation in June.

Trading data show that the year-to-date performance of Tier-1 banks (FBNH, UBA, GTCO, ACCESS, and Zenith –FUGAZ) pushed the banking index upward as the Nigerian Bourse All-share index hit the all-time high on Friday.

In the just concluded week, Zenith Bank’s popularity was boosted among value hunters, recording 8.7% gain over the last four trading sessions on the local bourse.

The bank of the year, according to the Banker, saw its market valuation surge to N1.319 trillion, maintaining its leading brand identity in the banking sector. Its share price settled at N42 following healthy earnings growth in Q3.

There is so much to like about the Ajose Adeogun-based financial services behemoth. This includes sustained year-on-year growth in profitability. It continues to rank higher in Tier-1 capital.

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 N42.50 per share, GTCO Plc valuation comes close after falling from the top, now ranked second most valuable in the banking sector category.

As of Friday, the Orange brand financial services holding company was priced at N1.251 trillion on 29.43 billion outstanding shares in the market.

Following a fast and furious bargain hunting, FBNH worth about N933 billion, sold at N26 per share in the Nigerian bourse. The financial services stock gained weight due to a 14% share acquisition by its erstwhile board chairman, Oba Otudeko. That booster was not however recognised (yet), setting a negative precedent in the market.

Access Holdings, the largest financial services by total asset has also seen its market valuation increase amidst stock market rallies.

However, Access Plc has now toppled FBNH in terms of market value, worth N944 billion as of Friday. FBNH’s valuation was the lowest in the category at about N933 billion. The bank share was priced at N26 on Friday.

Weekly stock market performance

Zenith Bank gained 8.7% in the just concluded week, while GTCO shares closed with about 5% share price appreciation in the first four trading sessions in the new year. Dangote Reacts to EFCC Visit to Headquarters

FBHN’s share also jumped 10% ahead of Q4 earnings festival. Meanwhile, Access Holdings’ share price gathered momentum with a 14.7% weekly gain. UBA pushed higher with about 13% increase in its market valuation.