Guaranty Trust Bank Plc (GTB) and Access Bank Plc both issued separate press releases informing investors that there would be delays to the release of their respective 2016 half-year results.
The Nigerian Stock Exchange expects results other than full year Audited Accounts to be released at least within 30 days after the end of the quarter. Both banks have now suggested a delay that could drag into late August 2016.
A section of retail investors are quite worried about these announcements suspicious that it could be a sign that things might not be very well with their earnings. Nigerian companies are fond of delaying results if it is likely to report material losses in their financials. Investors are also understandably worried considering the spate of profit warnings that have been issued by most banks as well as the fear that there could be more banks with inadequate prudential ratios. GTB and Access Bank both lost 3.9% and 1.43% on Tuesday. GTB’s 3.9% the most it has lost since June 27th 2016.
However, we do not see anything sinister associated with the delays as both banks typically pay interim dividends after their half-year results. Based on this, they will have to audit their financial statements and seek regulatory approval before making it public. Whilst we agree these shouldn’t take as much time as they have both suggested, a delayed result can be justifiable if it means that it will be audited. We will always accept an audited results over one that is not audited.
Nevertheless, we can’t rule our foul play completely as the Nigerian financial space is one that can’t be fully trusted. In this market, there is a lot more hidden information than public. We will continue to track this development and report if we get anything contrary to our views. For now, invest cautiously.
