The NGX All-Share-Index closed trading at 43,839.08 index points on October 31, 2022. Nairametrics understands that this was due to the build-up to the 2023 election, compounded by the hike in interest rates, which kept foreign investors at bay and triggered sell-offs by domestic investors.
Consequently, investors in the Nigerian equities market recorded a loss of about N2.574 trillion in October, as volatility in the economy continued to heighten.
Statistics obtained by Nairametrics showed that the All-Share Index (ASI) decreased by 10.57% to close at 43,839.08 points on October 31, 2022, down from 49,024.16 points which it started October with. Similarly, the market capitalisation recorded a monthly loss of N2.574 trillion to close at N23.878 trillion on October 31, 2022, as against N26.451 trillion it opened trading on October 4, 2022.
An overview of the banking index performance
Historically, the banking sector has always been one of the sectors that benefit from high inflationary environment and rate hikes. So, market experts expected the sector to perform well.
The banking index, which measures the performance of the banks quoted on the floor of the Nigerian Exchange, however depreciated marginally by 1.10% or 4.19 basis points during October 2022 to 375.01 points, from 379.20 index points at the beginning of trading on October 3rd.
Nairametrics analysed how the share prices of five tier-1 banks quoted on the floor of the Nigerian Exchange Group performed in October 2022. Notable among the banks are Zenith Bank Plc, Access Holdings Plc, FBNH Plc, UBA Plc and GTCO Plc.
Data obtained from the NGX showed that the stocks recorded mixed performance, out of the five banks, only one stock (i.e., UBA Plc) recorded share price appreciation.
On the other hand, three stocks — Access Holdings Plc, FBN Holdings Plc and GTCO Holdings Plc — recorded share price depreciation. Meanwhile, Zenith Bank Plc closed flat.
Below is a closer look at the tier-1 banks that gained and lost during the period under review.
The Gainer
United Bank for Africa (UBA) Plc- 2.14%
- The share of UBA Plc, a pan-African bank was the only tier-1 bank that enjoyed a positive run during the month. The stock gained 2.14% in share price during the month, rising from N7.00 to N7.15 per share. The company enjoyed considerable buy-interests which drove up the market capitalization to gain N5.130 billion to stand at N244.525 billion at the close of trading on October 31, 2022, from the opening figure of N239.395 billion at the beginning of trading on October 3.
- United Bank for Africa’s consolidated and separate financial statement for the period ended September 2022 shows that the bank raised its profit in the third quarter of the year by 10.95% to record N116.0542 billion from N104.597 billion in the third quarter of last year.
- During the period, the bank increased interest income by 22.26% to stand at N420.234 billion against N343.709 billion in the same period of 2021 as investment securities in treasury bills, bonds and others rose.
- The interest expenses were valued at N137.721 billion in the third quarter of 2022 from N114.444 billion in the third quarter of 2021 representing a growth of 20.34%, while net interest income rose by 23.23% from N229.265 billion to N282.513 billion in 2022.
- UBA closed its last trading day (Tuesday, November 1, 2022) at N7.10 per share on the Nigerian Stock Exchange (NGX), recording a 0.7% drop from its previous closing price of N7.15. United Bank for Africa began the year with a share price of N8.05 but has since lost 11.8% off the price valuation.
The Losers
GTCO Holdings Plc (0.28%)
- The shares of GTCO Holdings Plc witnessed a marginal negative run during the month. The banking has lost 0.28% in share price during the month, from N17.65 to N17.60. The negative sentiment drove down the market capitalization to lose N4.415 billion to stand at N517.988 billion at the close of trading on October 31, 2022, from the opening figure of N522.403 billion at the beginning of the month’s trading.
- Guaranty Trust Holding Co Plc released its third quarter 2022 financial result posting a pretax profit of N169.724 billion, representing a growth of 11.73% year-on-year over N151.907 billion reported in 2021.
- In its unaudited third-year financials submitted to the Nigeria Exchange Limited, the group also made significant improvements across key performance indicators.
- Analysis of the results indicates that the group’s Profit after tax stood at N130.348 billion from N129.400 billion posted in 2021, representing a marginal growth of 0.73%.
- Interest income calculated using the effective interest rate rose by 14.42% to N204.014 billion from N178.303 billion recorded in the half year of 2021as investment securities in treasury bills, bonds and others rose.
- GTCO closed its last trading day at N17.60 per share on the NGX. The lender began the year with a share price of N26.00 but has since lost 32.3% off the price valuation.
Access Holdings Plc –(3.11%)
- Access Holdings Plc also witnessed negative sentiment during the month. The lender lost 3.11% in price during the month, from N8.05 to N7.80. The bank witnessed sell pressure which drove down the market capitalization to lose N8.886 billion to close at N277.252 billion at the close of trading on October 31, 2022, from the opening figure of N286.139 billion at the beginning of trading.
- Access Holdings Plc released its half-year 2022 financial result posting gross earnings of N591.803 billion for its 2022 half-year results, representing a growth of 31.42% year-on-year.
- In its unaudited half-year financials submitted to the Nigeria Exchange Limited, the Bank also made significant improvements across key performance indicators.
- Analysis of the results indicates that the bank’s profit before tax rose marginally by 0.42% to N97.791 billion from N97.379 billion reported in 2021.
- Access Holdings closed the trading day at N7.90 per share on the Nigerian Stock Exchange (NGX), recording a 1.3% gain over its previous closing price of N7.80. The group began the year with a share price of N9.30 but has since lost 15.1%.
FBN Holdings Plc –(3.43%)
- FBN Holdings Plc dropped by 3.43% during the period under review, from N10.20 per share to N9.85 per share, reducing the market capitalisation to lose N12.563 billion or 3.43% to close at N353.568 billion in market capitalization on October 31, 2022, from the opening figure of N366.131billion.
- FBN Holdings Plc reported a profit for the year to date to the tune of N91 billion, a 123% high compared to the amount in the same period of 2021.
- Despite the presence of inflation during the period, the report shows that the group improved its interest income massively by 42.3% to stand at N370 billion from N260 billion in the previous year. This was majorly driven by an increase in investment securities as well as loans and advances to customers during the period.
- Similarly, the interest expenses also grew from N97 billion to N121 billion during the period as a result of deposits from customers and deposits from banks while the net interest income stood at N250 billion.
- Fees and commission income stood at N111 billion from N103 billion as the bank saw an increase in items such as letter of credit commissions and fees, account maintenance, custodian fees and others.
- FBNH closed its last trading day at N9.90 per share on the Nigerian Stock Exchange (NGX), recording a 0.5% gain over its previous closing price of N9.85. FBN began the year with a share price of N11.40 but has since lost 13.2% off that price valuation.
The remaining lender, Zenith Bank Plc closed flat at N20.00 per share month to date.