Nigeria’s Tier-1 Banks’ Valuation Soars to 5.7 Trillion
The combined market valuation of Nigeria’s Tier-1 banks has surged to an impressive N5.7 trillion, propelled by earnings growth and strategic loan repricing within a high-interest-rate environment. This upward trajectory signifies a notable N40 billion week-on-week increase, as reported by data compiled by MarketForces Africa.
By the conclusion of the third quarter for the 2024 financial year, these leading banks exhibited remarkable earnings growth, primarily attributed to loan repricing strategies and investments in securities. Despite varying performances among the financial heavyweights, common challenges concerning asset quality persist, partly due to lingering COVID-19-related forbearance, which remains undisclosed to the public. Analysts have also observed an increase in non-performing loans for certain banks; however, these figures remain below the regulatory threshold.
Amid a week characterised by mixed trading outcomes, three out of the five major lenders—GTCO, Zenith Bank, and Access Holdings—reported gains, defying the trend of negative price movements in the equities market. Conversely, FBN Holdings and United Bank for Africa (UBA) faced declines despite their solid earnings.
GTCO led the performance with a weekly market valuation gain of N97.122 billion, closing at N1.627 trillion, representing a 6.3% increase. Zenith Bank followed closely, adding N42.385 billion to its value, ending the week with a 3.4% rise to N1.295 trillion.
In contrast, FBN Holdings experienced a market value dip of 6.1%, equating to a loss of N62.817 billion, which settled at N969.172 billion amid a rights issue. UBA, the pan-African financial services provider, also encountered a downturn, shedding N37.619 billion, or 3.7%, to close at N991.783 billion.
Although Access Holdings holds the smallest market value among the Tier-1 banks, it managed to achieve a 0.2% gain, adding N1.77 billion to its valuation, thanks to robust third-quarter earnings.
These results underscore the resilience of Nigeria’s top banks in the face of economic pressures, with investors closely monitoring how these institutions navigate challenges and capitalise on the high-interest environment. Unveiling Sudden Infant Death Syndrome: Causes and Solutions
