Value of 14 Banks’ Stocks Tumble by N134bn on Investors’ Apathy

Kayode Tokede

As investors’ apathy and divestment around the banking stocks persists at the Nigerian Exchange Limited (NGX), the worth of 14 listed banks have depreciated by N134 billion in first half (H1) of 2022.    

According to THISDAY findings, the market capitalisation of banking sector heavy-weights such as:  Zenith Bank Plc, Access Holdings Plc, United Bank for Africa Plc (UBA) Plc, Guaranty Trust Holding Plc (GTCO) and Stanbic IBTC Holdings Plc were key contributing factors to the NGX Banking Index decline performance in the period under review.

The Vice President, Highcap Securities, Mr. David Adnori noted that, “It has been a challenging 2022 thus far for listed banking stocks on the NGX.

“Year-to-date, the sector index has returned a disappointing 2.04 per cent or 8.28 basis points to 397.79 basis points and has grossly underperformed the broader equities gauge (NGX-All Share Index: +21.3per cent).

Notably, the Banking index is the second-worst performing sector index after the insurance index on the NGX.

From all indications, the values of GTCO and Zenith Bank recorded the highest decline in the period under review, followed by Stanbic IBTC Holdings.

The market capitalisation of GTCO on the NGX depreciated by N161.87billion as the stock price fell by N5.50 or 21.15 per cent to N20.50 per share as of June 30, 2022 from N26.00 the stock price opened for trading in 2022.

Analysts attributed the decline in GTCO performance in stock price to weak unaudited first quarter (Q1) 2022 result and accounts for period ended March 31, 2022.

The group in its Q1 2022 financial result announced N43.21 billion profit, representing a decline of 5.1per cent from N45.55 billion reported in Q1 2021.

The company also reported earnings per share of N1.51, a 5.63per cent drop from the N1.60 reported in Q1 2021.

Also, Zenith Bank market capitalisation dropped by N108.32 billion, given a N3.45 or 13.72 per cent decline in stock price to N21.70 per share as of June 30, 2022 from N25.15 per share it commenced trading this year.

Other top decline performance in market capitalisation was Stanbic IBTC Holdings that dropped by N31.7billion, while Access Holdings and Unity Bank down by N1.78 billion and N1.05billion, respectively in H1 2022.

THISDAY reliable gathered that banks such as: Fidelity Bank Plc, Unity Bank Plc, Sterling Bank Plc, FCMB Group Plc and Union Bank of Nigeria Plc recorded marginal increase in stock prices on the NGX.

Others with marginal growth in stock price include:  ETI, Wema Bank Plc, FBN Holdings Plc and Jaiz Bank Plc.

However, Wema bank in H1 2022 gained N95.28billion in market capitalisation, on the backdrop of N2.47 or 343.06 per cent gain in its stock price to N3.19 from N0.72.

Analysts at Coronation Research in their latest report titled, ‘Nigerian Banks: Q1 22 earnings review’ said, “The narrative that the fundamentals of the banking sector are compelling has persisted, even as investor apathy around bank stocks remains. In our view, although bank margins and profitability have come down slightly in recent years, bank stocks have been oversold.

“In an environment where negative inflation-adjusted yields remain the theme, bank dividends continue to offer more attractive yields than Treasury bills. In addition, with yields on the rise, we think FY 2120 may have been the bottom in terms of banks’ profitability.”

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