Bank Stocks Record Losses In Third Quarter 2022

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The Nigerian All Share Index dropped by 5.39% to close trading at 49,024.16 points at the end of trading during the third quarter ended September 30, 2022.

The equity market has also sustained a bearish profile for four consecutive months since June this year.

The build-up to the 2023 election has kept foreign investors at bay and sell-offs by domestic investors deepen.

Also, the decision of the Central Bank of Nigeria (CBN) to increase the interest rate by 15.5% has further depressed investors’ appetite for equities to embrace money market instruments.

Checks by Nairametrics showed that activities on the Nigerian Exchange, which opened the quarter at N27.935 trillion in market capitalisation and 51,817.59, an index at the beginning of trading on July 1, 2022, closed on September 30, 2022, at N26.451 trillion and 49,024.16 index points, hence has earned a quarter to date loss of about N1.484 trillion or 5.39%.

A further check revealed that the NGX Banking Index, which measures the performance of the banks quoted on the floor of the Nigerian Exchange depreciated by 4.67% during the quarter, from 397.79 index points to 379.20 points.

Despite that, bank stocks offer strong fundamentals, especially the tier-one banks have continued to record losses following the pre-election year, in which rising interest rates are usually characterized by negative sentiments.

According to data obtained by Nairametrics from the NGX which focused on the poor-performing bank stocks during the q3, GTCO Holdings Plc, Access Holdings Plc, FBN Holdings Plc, Stanbic IBTC Plc, Zenith Bank Plc, UBA Plc, and FCMB Group Plc made the list of top seven poor performing firms with a cumulative loss of N291.830 billion in market capitalisation.

These stocks were selected based on their price performance from quarter to date and are represented by the percentage loss.

FCMB Group Plc (-4.91%)
Shares of FCMB Group Plc witnessed a negative run during the period under review. The group lost 4.91% in price during the third quarter, from N3.46 to N3.29 per share.

The selling pressure drove down the market capitalization to lose N3.366 billion to close at N65.150 billion at the close of trading on September 30, 2022, from the opening figure of N68.517 billion at the beginning of trading on September 1.

FCMB Group Plc sustained its profitable growth trajectory by recording an impressive 85.17% increase in profit after tax for the half year ended June 30, 2022, a significant jump to N13.992 billion from the N7.556 billion recorded in the same period in 2021.

Also, profit before tax was up by 73.15% Year-on-Year to N15.428 billion from N8.910 billion in 2021.

The three-month results also showed a significant leap in gross revenue by 33% to N126.224 billion, from N94.228 billion for the same period last year.

The profit was boosted by interest and discount income with a growth of 34.97% Year-on-Year to N98.087 billion from N72.670 billion for the half year of 2021.

In addition, fees and commissions rose to N22.068 billion in 2022 from N16.616 billion in 2021, a growth of 32.81%.
The shares of the company currently trade at N3.25 and have gained has since gained 8.7% year-to-date.

UBA Plc (-5.96%)

The share price of UBA Plc, decreased by 5.96 % during the period under review, from N7.45 per share to N7.00 per share, reducing the market capitalisation to a loss of N15.189 billion or 5.96% to close at N239.595 billion at the end of September 2022 from the opening figure of N254.785 billion.

United Bank for Africa (UBA) Plc recorded N85.7 billion Profit Before Tax in its audited financial results for the first half of 2022, H1’21, a 12.6% growth against N76.2 billion recorded in the same period of 2021.

The Bank also declared an interim dividend of 20 kobo per share for its existing shareholders.

The bank’s gross earnings hit N372.4billion, a 17.8% growth against the N316 billion posted in the same period in 2021.

A further breakdown of the Bank’s half-year result, which was filed with the Nigerian Exchange Group(NGX), showed that total assets continued on an upward trajectory, increasing 5.4% to about N9 trillion.

The shares of the company currently trade at N6.55 and has gained has since lost 18.6% year-to-date.

Zenith Bank Plc (-7.83% )

The shares of Zenith Bank Plc also witnessed a negative run during the period. The financial institution lost 7.83% in price during the quarter, from N21.70 to N20.00.

The bank witnessed sell pressure which drove down the market capitalization to lose N53.374 billion to stand at N627.929 billion at the close of trading on September 30, 2022, from the opening figure of N681.303 billion at the beginning of trading on July 1.

Bank Stocks Record Losses In Third Quarter 2022

Zenith Bank Plc posted a profit after tax of N111 billion for the first six months of 2022, a 5% increase from the amount in the first half of 2021.

The growth record is in spite of inflation which has continued on the uptrend, year to date.

The financial report by the company shows a rise in profit follows an increase in interest income recorded for the period of H1 2022 compared to the amount in the previous year.

The company increased interest income by a whopping N18.5% to close at N242 billion in the first half of the year.

This was triggered by loans and advances to customers which saw a record of N163 billion as well as government and other bonds at N51 billion among others.

Interest and similar expenses also rose to N56 billion from N43 billion causing the net interest income to stand at N185 billion.

The shares of the company currently trade at N19.30 and have since lost 23.3% year-to-date.

Stanbic IBTC Plc (-10.58%)
The share price of Stanbic IBTC Plc, decreased by 10.58% during the period under review, from N33.55 per share to N30.00 per share, reducing the market capitalisation to a loss of N45.997 billion or 10.58% to close at N388.709 billion at the end of September 2022 from the opening figure of N434.707 trillion in July 1.

Stanbic IBTC Holdings Plc posted a profit of N31 billion for the first half of the year 2022, a 36% high from the N23 billion it reported in the first half of last year.

Amid an inflationary period witnessed in the first six months of the year 2022, the company saw its gross earnings rise by 42 billion from N93 billion in the half year 2021 to reach N135 billion in the half year 2022.

The financial report by the company shows that the net interest income stood at N50 billion in the first half of 2022, indicating a jump from 32 billion in the same period last year.

This is as the net income and net expenses were valued at N68 billion and N18 billion respectively in the study period compared to N44 billion and N11 billion in the first half of last year.

The shares of the company currently trade at N28.20 and have since lost 21.7% year-to-date.

FBN Holdings Plc (-12.06%)

The shares of FBN Holdings Plc witnessed a negative run on the shares during the quarter. The financial institution lost 12.06% in price at the end of the third quarter, from N11.60 to N10.20.

The company witnessed sell pressure which drove down the market capitalization to lose N50.253 billion to stand at N366.131 billion at the close of trading on September 30, 2022, from the opening figure of N416.385 billion at the beginning of trading on July 1st.

FBN Holdings Plc posted gross earnings of N338.5 billion for its 2022 half-year results, representing a growth of 22.6% y-o-y from N276.1 billion reported in 2021.

In its unaudited half-year financials submitted to the Nigeria Exchange Limited, the Bank also made significant improvements across key performance indicators.

The result is on the back of an inflationary year, where businesses and their consumers have had to deal with the rising cost of goods and services.

The group reported Net interest income of N152.9 billion, up 49.3% y-o-y from N102.4 billion in 2021 while Non-interest income stood at N108.8 billion, down 2.4% y-o-y from 111.5 billion in 2021.

It reported Profit before tax of N60.0 billion, up 40.0% y-o-y from N42.9 billion in 2021. Its profit Profit after tax stood at N53.3 billion, up 42.3% y-o-y from N37.4 billion posted in 2021.

The shares of the group currently trade at N9.90 but have since lost 13.2% year-to-date.

Access Holdings Plc (-12.97%)
Shares of Access Holdings Plc have also suffered from the market slide with a loss of 12.97% in price during the quarter, from N9.25 to N8.05.

The negative activities drove down the market capitalization to lose N42.654 billion to close at N286.139 billion at the close of trading on September 30, 2022, from opening figure of N328.793 billion at the beginning of trading on July 1.

Access Holdings Plc reported gross earnings of N591.803 billion for its 2022 half-year results, representing a growth of 31.42% year-on-year.

In its unaudited half-year financials submitted to the Nigeria Exchange Limited, the Bank also made significant improvements across key performance indicators.

The result is on the back of an inflationary year, where businesses and their consumers have had to deal with the rising cost of goods and services.

Analysis of the results indicates that the bank’s profit before tax rose marginally by 0.42% to N97.791 billion from N97.379 billion reported in 2021.

Profit after tax stood at N88.739 billion from N86.819 billion posted in 2021, representing a marginal gain of 2.21%.

The shares of Access Holdings currently trade at N7.60 but have since lost 18.3% year-to-date.

GTCO Holdings Plc (-13.42%)
The share price of GTCO Holdings Plc, benefited from the market downturn dropping by 13.42% during the period under review, from N20.50 per share to N17.75 per share, decreasing the market capitalisation to lose N80.995 billion or 13.42% to close at N522.403.43 billion at the end of September 2022 from the opening figure of N603.399 billion on July 1.

Guaranty Trust Holding Co Plc posted pretax profit of N103.249 billion for its 2022 half-year results, representing a growth of 10.95% year-on-year.

In its unaudited half-year financials submitted to the Nigeria Exchange Limited, the Bank also made significant improvements across key performance indicators.

The result is on the back of an inflationary year, where businesses and their consumers have had to deal with the rising cost of goods and services.

Analysis of the results indicates that the bank’s gross earnings rose by 15% to N239.288 billion from N207.914 billion reported in 2021, driven by a 13% growth in net-interest income.

Profit after tax stood at N77.557 billion from N79.41`4 billion posted in 2021, representing a marginal drop of 2.34%.

Interest income calculated using the effective interest method rose by 15.5% to N134.985 billion from N116.864 billion recorded in the half year of 2021.

The shares of GTCO Holdings currently trade at N16.95 and year-to-date have appreciated by 34.8%.