FBN Holdings Shares Grossly Undervalued, Says Eke

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Goddy Egene

The current share price of FBN Holdings does not reflect the financial performance and future prospects of the holding company, the Group Managing Director, FBN Holdings Plc, Mr. UK Eke has said.

Eke, who stated this said while FBN Holdings has been recording highly improved financial results in the first and second quarters of the 2020, the performance has not reflected in the valuation of equity at the stock market.

FBN Holdings shares closed at N5.20 per unit last Friday, which is 20 per cent lower than its opening price for the year. Although he explained that the entire stock market has been on bear run for some time, shares of FBN Holdings have been grossly undervalued, noting that this provides a tremendous entry opportunity for investors.

“The relative undervaluation of FBN Holdings provides a tremendous opportunity for investors both locally and globally to benefit from the tremendous upside the stock provides. Today, the valuation of the business does not reflect the growing fundamentals as evidenced by the return on equity which has continued to improve quarter-on-quarter. More fundamentally, the Group has begun to reap the dividend of its investment in technology that has enhanced the earning capacity of the business and expanded our market reach,” Eke said.

He explained that the approach of company to closing the valuation gap was to continue to implement its strategy and deliver results, quarter-on-quarter.
“Nothing succeeds like success and performance is the best response to market hesitation and skepticism. We believe the valuation will ultimately reflect the strength of the business,” he said.

Speaking on the impact of COVID-19 on the business, Eke said FBN Holdings has continued to assess the impact not only on its income in the immediate but also medium-to-long-term impact on its customers and their ability to meet obligations.

“And in line with the commitment to supporting our customers and providing leadership in the financial services industry, we will continue to provide unfettered access to financial services to our customers and address their needs. We are working in line with the guidance of the regulators including the Central Bank of Nigeria (CBN) in providing access to funding as we seek to kick-start the economy and drive growth,” he said.

He assured stakeholders that overall, “the impact on our business has been broadly in line with our expectations, and our resilience, breadth of offerings, and investment in alternative channels have ensured that the Group is able to cushion the effect and thrive.”