NPF MFB Spikes ahead of Earnings, Dividend Announcement

Equities investors showed interest in NPF Microfinance Bank Plc.’s shares in the stock market last week ahead of a plan to release its audited financial scorecard for the financial year 2022.

Seen a relatively strong demand, the micro lender’s share price inched upward. Market data showed that NPF share price surged after the board of directors indicated a plan to pay final dividend for the year 2022.

Last week, the company told the Nigerian Exchange it’s seeking approval from the Central Bank of Nigeria for financial statement release. This resulted in bargain hunting which some analysts may extend into the new week as investors begin to digest monetary policy rate hike.

Banks are more likely to benefit from benchmark rate hikes, according to some analysts, saying the sector may see net margin strengthened. On the downside, lending may not be attractive.

At the community level where NPF MFB operates, there is a tendency for the microlender to have already overpriced loans – given the industry’s pattern in addition to changing market dynamics.

Though the microlender recorded a relative share appreciation, its tiny market value didn’t shake the Nigerian Exchange which eventually closed in the red.

In the last five years, dividend payment has been steadied in line with its earnings performance over time. Though the equities segment of the Nigerian Exchange reported a N23.24 billion decline over the five days trading session, NPF MFB (Ticker: NPFMCRFBK) gained 7% to close at N1.85.

Data from the local bourse show the NPF MFB has gained 9.47% from the beginning of the year to date. Its valuation surged to N11.086 billion on Friday over 5.992 billion outstanding shares.

In the latter part of 2022, the Nigerian Exchange approved a free float compliance extension requested by NPF MFB to December 2023, invariably the microlender isn’t currently meeting the requirement.

Its unaudited financial statement published earlier in the year shows that the microlender financial scorecard improved from last year’s level. Given the figure in its financial scorecard, NPF MFB grew profit to N1.257 billion, about 75% above the profit level in 2021 when post-tax profit printed at N707.493 billion.

NPF MFB gross earnings inched to N7.182 billion in 12-month from N5.770 billion in the comparable period. It is not clear whether the board of directors will push dividend payments higher due to a strong earnings beat.

However, there is a clear indication that its final dividend may increase based on the fact that the board recommend lower payment in 2019 over lean earnings performance. #NPF MFB Spikes ahead of Earnings, Dividend Announcement.