Eleven out of fifteen financial institutions shares quoted on equities market of The Nigerian Stock Exchange (NSE) have performed worst in 30-week of market activities that closed last week.
These finance institutions include Union Bank of Nigeria Plc, Diamond Bank Plc, and Ecobank Transnational Incorporated.
Others are Fidelity Bank Plc, FCMB Group Plc, Wema Bank Plc and Stanbic IBTC Holdings Plc.
The above mentioned banks are currently facing capital, shortage in foreign exchange income and asset quality challenges, following the sharp and elongated decline in global oil prices, which is having significant ripple effects on the nation’s economy.
During this period, The NSE banking Index depreciated by 0.64 per cent to 266.76 basis points from 268.49 basis points
According to data gathered by Nigerian NewsDirect, Skye Bank topped the chart as shareholders’ value in the troubled bank dropped by 46.2 per cent or N0.73 in 30-week from N1.58 it opened the year to N0.85 it closed on Friday July 22, 2016.
Market analysts said Central Bank of Nigeria’s (CBN) removal of Skye Bank management led to surge shareholders profit-taking but confidence was restored last week when the apex banking regulating body injected fresh capital to boost liquidity.
The bank share price had appreciated by 41.67 per cent or N0.25 from N0.60 it opened on Monday, July 18 to close at N0.85 as at July 22.
FBN Holdings Plc came second as shareholders lost 33.9 per cent or N1.74 to N3.39 on Friday from N5.13 it opened the year.
The holding company share price hits N7.00 this year and recorded N3.00 low price after releasing first quarter results that failed to meet shareholders’ expectation.
For the first quarter of 2016 (Q1 2016), FBN Holding had reported a decline of 8.31 per cent from N22.06 billion in Q1 2015 to N20.7 billion in Q1 2016.
Coming close to FBN Holdings is Union Bank of Nigeria Plc that fell by 34.8 per cent or N2.40 in its share price from N6.90 it opened the year to N4.50 it closed last week.
Diamond Bank Plc came fourth, dropping by 30.9 per cent or N0.71 to N1.59 as against N2.30 it opened in 2016.
While speaking on Diamond bank slide in share price, market analysts expressed that speculation over CBN takeover has continued to erode the bank’s shares recently.
Ecobank Transnational Incorporated and Sterling Bank Plc depreciated by 29.8 per cent or 29.5 per cent respectively.
The pan-Africa bank share price moved from N16.80 to N11.80 while Sterling Bank dropped by N0.54 from N1.89 to N1.29.
Shareholders of Fidelity Bank Plc have lost 24 per cent or 0.36 from N1.50 to N1.14 in 30-week the equities market closed.
Other financial institutions in the chart include Wema Bank that fell by 22 per cent or N0.22 from N1.00 to N0.78.
Shareholders in FCMB Group Plc and Stanbic IBTC Holdings Plc have lost 21.9 per cent and 21.4 per cent to close 30-week at N1.32 and N13.00 respectively.
Unity Bank Plc has the lowest share price decline of 17 per cent or N0.19. The bank share price moved from N1.12 to N0.93.
Only four banks that comprise United Bank for Africa Plc (UBA), Guaranty Trust Bank Plc (GTBank), Zenith Bank Plc and Access Bank Plc have continued to record high demand in 30-week under consideration.
Despite global and local macro economic challenges, these four banks have maintained stronger fundamentals as indicated in profitability and assets quality.
UBA share has increased by 30 .2 per cent or N1.02 from N3.38 it opened the year to N4.40. In this instance, Renaissance Capital and CSL Stockbrokers have placed a “Buy” rating on UBA, describing the bank as very attractive with a strong potential to generate returns of more than 100 per cent in the next 12-month period. The “buy” rating on UBA, underlines its attractiveness despite the general downward trend at the stock market.
GTBank, the most highly capitalized bank shares on NSE closed in 30-week with a gain of 15.7 per cent or N2.85 from N18.18 to N21.03 while shareholders that invested in Zenith Bank shares have benefited a 9.4 per cent or N1.32 price appreciation from N14.05 it opened the year to N15.37 equities market closed on Friday.
Furthermore, a share of Access Bank has appreciated by 6.4 per cent or N0.31 to N5.16 as the market closed on Friday from N4.85 it opened this year .
Some market operators said the strong investment case for UBA, GTBank, Access Bank and Zenith followed the recent affirmation of its credit rating by Fitch Ratings as well as an upgrade by Agusto & Co.
Recent report by Fitch Ratings, a global rating agency, said GTBank remains one of the top two rated banks in Nigeria.