Tier-1 Banks Shrink to N5.8Trn as Investors Rebalance Portfolios

The combined market value of Nigerian Tier-1 banks declined as equities investors’ mood shifted ahead of the fourth quarter 2023 earnings festival. Access, Zenith, UBA, FBNH and GTCO share prices declined week on week, market data tracked by MarketForces Africa revealed.

From more than N6.132 trillion registered at the beginning of last week, these big lenders’ combined market capitalisation dropped below N5.8 trillion on Friday. The decline in the equities market cap of the five leading deposit money banks came ahead of the company’s fourth quarter of earnings releases.

Most investment banking firms tracked are overweight on Tier-1 lenders controlling more than 70% of the entire market share in the banking sector. Some listed companies are warming up to launch their results in January, analysts said noting that their general expectation that FX induce pressure witnessed in Q3 must have receded.

Big banks’ stock market valuation has seen an uptrend since the last quarter earnings festival. FX gained had pushed the domestic deposit money banks’ profitability upward after the surprise naira devaluation in June 2023.

Data from the Nigerian Exchange showed that the valuation of these big banks dropped by N360 billion over a week due to selloffs.

The breakdown from the top big five banks tracked by MarketForces Africa showed that Zenith Bank’s market capitalisation declined to N1.35 trillion on Friday, from N1,486 trillion in the comparable week.

The tier-1 lender share price declined from N47.35 to N43 after large selloffs seen in the banking sector. GTCO Plc also registered a decline in its market value in the same period. The orange brand fell to N1.362 trillion last week from N1.418 trillion as price nosedived to N46.3 from N48.2 over 5-day.

Traded at N31, UBA Plc’s market capitalisation declined to N1.06 trillion as equities investors’ mode on the Pan African lender shifted ahead of its earnings release. Due to a strong rally, its market valuation had printed at N1.146 trillion in the recent past week.

FBNH is now ranked as the fourth largest by market capitalisation in the banking sector category. On Friday, the oldest listed financial institution’s market worth slid to N1.005 trillion from N1.026 trillion with share price settling at N28.

Also traded at N28 per share, Access Holdings Plc went down below N1 trillion in market capitalisation, from N1.056 trillion in the comparable week as investors dumped the group shares in the open market.

Data from the Nigerian Exchange showed that the largest bank by total assets is now worth N995 billion. #Tier-1 Banks Shrink to N5.8Trn as Investors Rebalance Portfolios Naira Rises by 19% as Forex Market Pressures Ease