Nigerian Banks Market Valuations Soften Further

Nigerian Banks Market Valuations Soften Further
Nigerian banks

Nigerian Banks Market Valuations Soften Further


Nigerian banks’ market valuations have dropped significantly, and it appears few of the players have been spared in selloffs in the local bourse.  Few gains were driven by small-cap banks in the tier-2 category.

A large number of Broadstreet analysts have often said the local deposit money banks’ share prices are trading below their peers in the frontier, and emerging markets alike, noting that the local bourse has failed to reward top performers.

Last week’s trading records showed that the Nigerian Exchange banking index slipped 3.3% due to selloffs in FCMB, UBA, and FBNH including Access Bank Plc – their individual share price became cheaper than their respective opening prices.

Trading data shows that FBNH’s share price was 5.7% lower while ACCESSCORP lost 6.2% of its market valuation last week. Similarly, UBA’s share price valuation declined by 6.0%, while Zenith Bank dropped by 1.5% and Union Bank of Nigeria was 4.2% cheaper to buy – to lead the weekly loss.

Trading data shows that FCMB shed 8% trailed by a 7% price down in FIDELITY Bank which also lost 7%. Market data shows that sectorial performance was negative as all five sectors posted losses.

Overall, the Banking index dropped by 3.3% followed by the Insurance segment which lost 2.6%. Consumer Goods index fell by 0.3% while Industrial Goods lost 0.2% and Oil & Gas slowed down by 0.2%.

A review of share price movements from the beginning of the year to date revealed that there are few gainers in the banking sector in terms of capital appreciation from the beginning of the year to date.

Shares of Tier-2 banks outperformed in terms of gains but dividend payment is not as strong as Tier-1 capital banks.

Zenith Bank Down 21.94%

Nigerian largest bank by valuation stock market price peaked at N25.30 on January 4, 2022. As of Friday’s close, the bank share price was sold for N19.75 despite a strong earnings outing and a stable dividend policy.

Investors price Zenith Bank for N620.081 billion on Friday in the stock market – the largest valuation for a local deposit money bank in the local bourse.

GTCO slides 24.23%

On January 4, 2022, GTCO was sold at N26 per share on the local bourse. As of Friday’s close, the Nigerian tier-1 capital lender has seen its share price drop to N19.70, now trailing Zenith Bank’s market valuation.

The group has a positive record of driving earnings momentum. However, its profitability has been peppered by rising costs profile after it launched its Holdco structure. Local investors put about N580 billion as the market price for GTCO in the stock market, the second largest by valuation in the banking sector.

STANBIC IBTC Lost 22.37%

Stanbic IBTC’s share price was traded at N38 first day of January 2022. The bank’s share price has been relatively volatile. At N28 on August 16, the share hit the low but made an uptrend to close at N29.50 on Friday.

Stanbic IBTC is worth N382 billion in the stock market after the bank’s share price was priced lower on a sustained slowdown in earnings performance.

FBNH Lost 11.50%

FBNH dropped big in the just concluded as selloffs greeted the local bourse, dragging overall market performance lower. The banking index dropped .30% but FBNH let off 5.70%.

FBNH’s share price was N11.30 on the first trading day in 2022. On 20 June, it hit the low at N9 per share but cross the recovery line thereafter. It closed at N10 per share on the local bourse on Friday, translating to a year-to-date loss of 11.50%.

Investors placed about N359 billion as the market price for FBNH following the strategic incursion of billionaire shareholder Femi Otedola which triggered rerating.

UBA is down 28.76%

UBA share is tracking lower, lost 28.76% from the beginning of the year to date amidst selloffs in the local bourse. At the beginning of 2022, the Pan African lender’s share price was N8.05. On July 28, the market price of the bank share was at its lowest at N6.80.

The bank’s share has an element of volatility as it fell below the recovery line multiple times before it printed at N7.10 on Friday. UBA is worth about N243 billion in the local bourse as Pan African lender moves to expand its footprint in Dubai, United Arab Emirates.

ECOBANK Pops 24.16%

ETI share opened the year at N8.90, making an uptrend to N13.10 on January 28, 2022, follows by a wave-like trading pattern which saw the price fall to N10.10 on 21 June 2022 before another uptrend started.

On Friday, the Pan African lender was priced at N11.05 per share. Ecobank appears relatively volatile on the local bourse.

Ecobank is valued moderately at N201 billion in the local bourse following its balance sheet clean-up efforts that set the Pan African lender on a growth trajectory.

Union Bank of Nigeria down 0.86%

Union Bank of Nigeria was opened at N5.80 in January 2022. The tier-2 banking stock has made a series of up-and-down trends in the local bourse. It hit the peak of N6.55 on 16 May 2022 but closed lower at N5.75 per share on Friday.

Its lowest low was when the market price of the bank share at N5.00 on July 28, 2022. A Pharaoh-like dream came to fulfilment in 2022 as one of the smallest players in the banking sector would be merged with the centenary lender.

UBN worth N16.44 billion to equity investors in the local bourse as the centenarian lender would be merging with one of the smaller banks, Titan Trust Limited, in the banking sector.

Fidelity Bank Gains 33.73%

Fidelity Bank opened the year at N2.55, peaked at N4.05 on April 22 before it sloped down to N2.90 on July 27. On Friday, Fidelity Bank’s share price printed at N3.41 after its weekly loss. The tier-2 bank ranks among the stock market’s top performers.

Fidelity Bank will be repaying its $400 million Eurobond due this October. Recall that the bank issued the 5-year bond in October 2017 at a 10.50% coupon.

Fidelity Bank is worth about N99 billion to the Nigerian Exchange as Friday’s close amidst a plan to raise fresh capital to finance its Union Bank UK acquisition via private placement.

Wema Bank appreciate 45.99%

Wema bank opened the year at N2.37 per share. The bank made a series of uptrends before it hits the first peak market price of N3.75 on May, 9.

The stock market re-priced the bank share down and there was a fresh uptrend that push its share price to N4.00…which appears to be 2022 high so far. As of Friday’s close, the bank share price ended at N3.46.

Wema Bank has been focusing on a digital-led strategy after it switched to a national bank from a regional operator seven years ago. Management seeks fresh capital after share reconstruction.   The bank is worth N44.49 billion to its shareholders as of Friday.

Sterling Bank drops 1.96%

Sterling Bank was priced at N1.53 at the beginning of the year, and share trades with wavelike movements before its first peak at 1.73 at the end of January.

On April 14, the bank share was at its lowest in the year at N1.40, making further recovery to N1.60 on 26 May 2022. The bank’s share price closed at N1.50 on Friday amidst selloffs in the local bourse.

Sterling Bank can be bought for N43 billion on the floor of the Nigerian Exchange as of Friday’s close, according to trading data.

Unity Bank lost 23.10%

Unity Bank opened the year at 52 kobo and hit the year high at 54 kobo while its lowest market price this year was 40 kobo which coincidentally was its Friday’s closing price.

Unity Bank can be bought at a sum less than N5 billion, trading below the value of its banking license.

Jaiz Bank gains 44.83%

Jaiz Bank has a market price of 58 kobo on the local bourse as the stock market opened in January. The Islamic bank opening price has been its lowest since the beginning of the year.

Its share price has made a series of swings lows and highs before it printed at 84 kobo on Friday. This translates to a 44.83% jump from the beginning of the year to date.

Jaiz Bank is worth N29 billion to its shareholders and the Nigerian Exchange for a bank that has been around for just a decade.

FCMB Appreciates 13.33%

At the beginning of the financial year, equity investors priced FCMB shares at N2.85 per unit in the stock market. Trading data shows that the bank made a series of climb and fall before it printed at its peak of N3.88 as of 29 April 2022.

Its lowest market price was N2.92 reached on February 10 while it closed the week at N3.23, falling from N3.50 on Sept. 9. FCMB’s market price was about N64 billion on Friday.

#Nigerian Banks Market Valuations Soften Further#