The Nigerian banking index recorded a significant downturn last week, triggered by the markdown of leading financial institutions—GTCO, Zenith Bank, and United Bank for Africa (UBA) Plc—on account of dividend payments. Market analysts also observed notable selloffs across several banking stocks.
The markdown, which reflects the 2024 dividend payout adjustment, negatively impacted the share prices of these major banks. In addition to the dividend adjustment, brokers noted prevailing sell pressure affecting the market valuations of the affected institutions.
Data obtained from the Nigerian Exchange (NGX) revealed that both the banking and insurance sectors ranked as the poorest performers during the trading week. The sharp fall in valuations for UBA, Zenith Bank, and GTCO, spurred by dividend markdowns and selling sentiment, played a substantial role in the decline.
According to the report, the banking index slid by 5.43%, positioning it as the weakest sector on the exchange, followed by the insurance index which retreated by 2.34%. The losses were primarily attributed to declining share values in GTCO, Zenith Bank, International Energy Insurance, Mutual Benefits Assurance, and UBA.
GTCO saw its market capitalization shrink by 13.24%, driven by a mix of bearish investor sentiment and the dividend markdown. Similarly, Zenith Bank’s share value dropped by 11.91%, while UBA experienced a 9.07% decline over the same period.
At the close of trading, Zenith Bank’s stock settled at N44 per share on an ex-dividend basis, translating to a market capitalization of N1.807 trillion for the Lagos-headquartered lender.
UBA, trading at N32.1 per share after the ex-dividend adjustment, closed with a market value of N1.097 trillion. GTCO’s valuation slipped to N2.014 trillion after the markdown, which followed the declaration of a final dividend of N7.03 per share, compounded by additional sell pressure in the market.
