The total market capitalization of Nigeria’s main five banks has fallen below N4 trillion as a result of negative sentiment toward banking equities. Following the suspension of former Central Bank governor Godwin Emefiele, the banking index soared dramatically.
After years of margin-diluting circulars that pummeled operators in the past, the market had reacted favourably to the promise of greater regulation in the industry.
Aside from that, FBNH’s market valuation had increased as its former chairman began the process of returning to the board after learning that Emefiele had been suspended. Oba Otudeko had increased his stake in FBNH to 14%, unseating Femi Otedola.
This new entrance into FBNH elicited reactions that lowered favorable opinion about the company, all while raising funds to sustain the banking arm’s declining capital adequacy ratio.
The share price of FBNH has plummeted and has remained stable for some time in the absence of a prospective uptrend. This has preserved the market valuation of the financial services company at over N578 billion, placing it ahead of Nigeria’s largest bank by total assets, Access Plc.
According to stock market data, Access Holdings Plc maintained its position, finishing at around N549 billion, while UBA’s market valuation recently exceeded N600 billion due to its Pan African edge on financial results.
UBA’s capital adequacy position remained top-notch in the sector, according to data from Fitch Ratings while some of the tier-2 bank operators in the sector are noted to be facing fresh capital raise.
Fidelity Bank is expected to raise capital just like the Tier 1 player, FBN, and the rating watch negative slammed on FCMB suggests the group may be required to visit the local debt capital market to upgrade its position.
Zenith Bank’s market valuation has slumped to N1.004 trillion as investors’ sentiment weakened ahead of the third quarter of 2023 earnings season. Also, GTCO has given up some gain to close at N1.021 trillion, according to data from NGX.
The two rivals in the banking sector have been struggling to break out from lower N1 trillion in market cap unsuccessfully. #Market Value of Big 5 Banks in Nigeria Slides to N3.75T
