FBNH Inches Near N490bn in Market Value

Beyond earnings performance, positive sentiment on FBNH has driven the financial services group market valuation to about N490 billion. This effectively pushed the group valuation in the local bourse above Access and UBA Plc.

Access Holdings is worth N363 billion while UBA Plc’s market valuation is N287 billion as of yesterday, according to data from the Nigerian Exchange. Zenith maintains the lead in terms of earnings, and valuation in the tier-1 category, followed closely by GTCO.

The ticker has been on the uptrend even without slight detail of any public information driving such momentum.  Though, a fine re-rating if its earnings performance in the third quarter of the financial year 2022 could be sustained. FBNH has to prove it has left the ‘chilling stock’ class to join the big league.

The increased market valuation is on nothing but sentiment. What’s fueling investors’ sentiment isn’t clear despite the fact that FBN Holdings has not produced its audited statement for 2022, and its quarterly result is also missing.

The elephant is dancing smoothly and when it crossed N500 billion in market valuation, it would have raised its year-to-date return to 30% – and that’s impressive for value hunting investors.

The group indicated that its audited statement and first quarter results for 2023 will be released concurrently in May 2023. Apparently, the regulator hasn’t completed scrutiny of the audited statement.

At the close of the market, FBNH’s valuation inched to N486.38 billion, at a unit price of N13.55. There were questions about the holdings’ capital position – the capital adequacy ratio of the bank was weak.

In 2021, FBNH achieved a 99.1% jump in pre-tax profits to N166.7 billion, aided by the recovery of bad debt loans from its customers during the period.

Equity analysts told Daily Global News that a pre-tax profit of N166.7 billion achieved is a new earnings record for the group operation that must be maintained going forward.

Recall the management had embarked on a balance sheet cleaning programme that has set the group on the path of recovering its brand identity among competing brands and increased rivalry with peers.

A total sum of N141 billion was recovered, according to the audited statement which included bad debt of Atlantic Energy which had been written off due to a low probability of recovery after the client defaulted. Overall, FBNH Plc’s profit after tax for 2021 surged 68.4% to N151.1 billion.