Nigeria’s Tier-1 Banks See Market Value Surge to N4.81 Trillion Amid Mixed Trading

Nigeria’s leading Tier-1 banks have seen their combined market value rise to N4.81 trillion on the stock market, driven by increased investor interest in Zenith Bank, UBA, and FBN Holdings Plc, according to recent data from the Nigerian Exchange.

Despite the upward trend, investor interest in Access Holdings and GTCO Plc waned, leading to declines in their stock prices, contrary to the overall positive market direction. Analysts anticipate that investor focus will shift towards the earnings prospects of these major banks, especially those yet to release their financial results for the second quarter of 2024.

Key Highlights:

Market Performance: The banking index increased by 1.05% week-on-week, buoyed by the positive performance of three out of the five Tier-1 banks. This growth followed the release of the second-quarter economic growth data.

Sector Dynamics: Access Holdings, the largest bank by total assets, experienced a significant drop in its market value due to selling pressure, partly attributed to delays in its earnings report for the first half of 2024. Despite this, the overall decline in the banking index was moderated by gains in other banks, including GTCO, Zenith Bank, and UBA.

Stock Valuations: The tier-1 banks are currently trading at notable discounts to their 52-week highs. GTCO leads in terms of return on equity (ROE) at 36.53%, followed by UBA (29.93%), Zenith (29.13%), Access (28.34%), and FBNH (18.23%).

Market Trends:

• GTCO Plc saw its market value decrease slightly from N1.342 trillion to N1.339 trillion, with its share price falling to N45.5 from N45.6. The bank is trading at a 15.66% discount to its 52-week high.
• Zenith Bank Plc saw an increase in market value to N1.200 trillion, up from N1.189 trillion, with its share price rising to N38.25 from N37.90. It is trading at a 19.21% discount to its 52-week high.
• UBA Plc's market value grew to N785 billion from N766.067 billion, with its share price rising to N22.95 from N22.45. It is trading at a 32.5% discount to its 52-week high.
• Access Holdings Plc saw a decrease in market value to N675 billion from N706 billion, with its share price falling to N19 from N19.95. The stock is trading at a 38.11% discount to its 52-week high.
• FBN Holdings Plc’s market value climbed to N730 billion by the end of Friday’s trading session, reflecting positive movement in the banking index. This marks a notable rebound from the previous week when the company’s valuation increased to approximately N808 billion, up from N752.006 billion, due to strong buy-side activity in the stock market. The upward trend highlights growing investor confidence and market enthusiasm for FBN Holdings Plc, aligning with the broader positive movement observed within the banking sector.

In summary, while the Tier-1 banks have shown an overall increase in market value, individual stock performances vary, reflecting investor sentiment and expectations surrounding upcoming earnings releases.