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The combined market valuation of Nigeria’s leading five banks has experienced a significant surge, reaching approximately N3.5 trillion. This increase is attributed to investor interest in financial services brands with a track record of dividend payments and solid market fundamentals.
Data from the stock market screener reveals the upward trajectory, marking a substantial rise from the reported valuation of these Tier-1 capital banks, which was below N2.5 trillion last year, as previously reported by MarketForces Africa.
Despite challenges in the market, these local banks have shown spikes in their top-line performance, as indicated by their separate audited reports. They have successfully navigated through earnings pressures in the first quarter, even amidst the naira crisis.
The equities market has also witnessed improved sentiment, with trading data indicating an enhanced year-to-date performance for Tier-1 banks (FBNH, UBA, GTCO, ACCESS, Zenith – FUGAZ), leading to a surge in the banking index.
Ahead of the release of second-quarter earnings, Tier-1 banks with strong net foreign exchange (FX) positions are expected to boost their earnings through revaluation gains following the decision to float the naira by the monetary authority.
Access Holdings Plc has achieved a year-to-date return of approximately 75%, ranking highest in the tier-1 capital stock market performance, according to data analyzed by analysts. Following closely is FBNH, with a year-to-date return of over 62%.
During the past week, Zenith Bank witnessed a significant rally, recording a gain of more than 3% in the last five trading sessions on the local stock exchange. This profitable lender’s valuation soared to approximately 1.005 trillion, reinforcing its leading position in the banking sector. Its share price settled at N32 after reporting healthy earnings growth in the first quarter of 2023.
Zenith Bank’s sustained year-on-year growth in profitability, coupled with its strong dividend policy and performance, has garnered praise from equity analysts. It remains the most valuable bank on the local stock exchange, with a strong buying rating.
GTCO Plc, traded at N31.45 per share, closely follows Zenith Bank in terms of valuation, ranking as the second most valuable bank in the sector. The financial services holding company is valued at around N926 billion, with 29.43 billion outstanding shares in the market.
FBNH, with a valuation of approximately N621 billion, experienced robust buying activity but falls behind Stanbic IBTC, a tier-2 lender in the industry. Stanbic IBTC, trading at N44 per share, is valued at N671 billion.
Access Holdings, the largest financial services company in terms of total assets, has also witnessed an increase in market valuation amid the recent stock market rallies. The valuation of Access Holdings Plc stood at N531 billion, with a share price of N14.95 as of the close of Friday’s trading. It should be noted that UBA’s valuation also rose, although it remains the smallest among the Tier-1 banks, with a market valuation of approximately N392 billion. The bank’s share was priced at N11.45 on Friday.
Weekly Performance of Bank Stocks
Zenith Bank gained 3.125% during the past week, while GTCO shares closed with a 2.7777% appreciation in share price over the last five trading sessions. FBNH also experienced a 9.5% surge, despite underwhelming earnings performance in 2022.
Furthermore, Access Holdings’ share price gained momentum with a weekly increase of 4.91%. Following this uptick in Access shares, UBA also exhibited positive growth with a 3.15% increase in its market valuation.
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