FBN Holdings becomes Nigeria’s biggest lender by market value
FBN Holdings, the parent company of Nigeria’s oldest commercial banking institution First Bank, attained its all-time peak valuation on Monday.
The feat was recorded after a week of sustained gains catapulted the worth of its shares beyond N1.2 trillion.
The valuation lifts the financial services group to a new milestone as Nigeria’s biggest lender by market capitalisation, pushing peer Guaranty Trust Holding Company, which has held the title for a while, to the back seat.
Following an almost twofold surge in net profit for last year to nearly N310 billion, FBN Holdings has profited from increased buy interest from equity investors since the start of February, helping drive its share price steadily up.
The total number of the company’s shares traded on Monday alone was 197 per cent higher than the average daily traded volume in the last 13 days, by PREMIUM TIMES calculation.
“Really, there is nothing driving the stock. If you remove the Otedola factor,” there is no major catalyst moving it, said an equity trader on the Nigerian Exchange who doesn’t want to be named.
Mr Otedola, a billionaire tycoon with investments in energy, cement manufacturing and financial services, was appointed to chair the directors’ board of FBN Holdings at the end of January.
READ ALSO: Nigerian stocks rebound with N106 billion, driven by bank shares
He holds a 5.7 per cent stake in the corporation, second only to Barbican Capital Limited, which has a 13.6 per cent interest, according to the latest unaudited report of the lender
Barbican Capital Limited is controlled by Oba Otudeko, a former chairman of the group, who was ousted by the industry watchdog Central Bank of Nigeria about three years ago, following allegations of wrongdoings including corporate governance breach.
“By the time FBN Holdings announces dividend, the stock will go back to its place,” the trader said, hinting that price correction may set in and force the share price to fall when the group declares the dividend for the year in question.
Currently, the price-to-book (PB) ratios and the price-to-earnings (PE) ratios of big rivals like Access Holdings, United Bank for Africa and Zenith are more attractive than those of FBN Holdings.
Both the PB ratio and PE ratio are used by investors to determine stocks with strong fundamentals for investment purposes.
At 44.4 per cent, the stock has well outperformed the NGX Banking Index, the benchmark that tracks the performance of top equities in the banking industry in terms of liquidity and capitalisation. NGX Banking Index has returned less than one per cent so far this year.
The return on FBN Holdings shares has also beaten Nigeria’s headline inflation, which hit its peak in nearly three decades last month at 29.9 per cent.
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FBN Holdings, the parent company of Nigeria’s oldest commercial banking institution First Bank, attained its all-time peak valuation on Monday.
The feat was recorded after a week of sustained gains catapulted the worth of its shares beyond N1.2 trillion.
The valuation lifts the financial services group to a new milestone as Nigeria’s biggest lender by market capitalisation, pushing peer Guaranty Trust Holding Company, which has held the title for a while, to the back seat.
Following an almost twofold surge in net profit for last year to nearly N310 billion, FBN Holdings has profited from increased buy interest from equity investors since the start of February, helping drive its share price steadily up.
The total number of the company’s shares traded on Monday alone was 197 per cent higher than the average daily traded volume in the last 13 days, by PREMIUM TIMES calculation.
“Really, there is nothing driving the stock. If you remove the Otedola factor,” there is no major catalyst moving it, said an equity trader on the Nigerian Exchange who doesn’t want to be named.
Mr Otedola, a billionaire tycoon with investments in energy, cement manufacturing and financial services, was appointed to chair the directors’ board of FBN Holdings at the end of January.
READ ALSO: Nigerian stocks rebound with N106 billion, driven by bank shares
He holds a 5.7 per cent stake in the corporation, second only to Barbican Capital Limited, which has a 13.6 per cent interest, according to the latest unaudited report of the lender
Barbican Capital Limited is controlled by Oba Otudeko, a former chairman of the group, who was ousted by the industry watchdog Central Bank of Nigeria about three years ago, following allegations of wrongdoings including corporate governance breach.
“By the time FBN Holdings announces dividend, the stock will go back to its place,” the trader said, hinting that price correction may set in and force the share price to fall when the group declares the dividend for the year in question.
Currently, the price-to-book (PB) ratios and the price-to-earnings (PE) ratios of big rivals like Access Holdings, United Bank for Africa and Zenith are more attractive than those of FBN Holdings.
Both the PB ratio and PE ratio are used by investors to determine stocks with strong fundamentals for investment purposes.
At 44.4 per cent, the stock has well outperformed the NGX Banking Index, the benchmark that tracks the performance of top equities in the banking industry in terms of liquidity and capitalisation. NGX Banking Index has returned less than one per cent so far this year.
The return on FBN Holdings shares has also beaten Nigeria’s headline inflation, which hit its peak in nearly three decades last month at 29.9 per cent.
Support PREMIUM TIMES’ journalism of integrity and credibility
Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.
For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.
By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.
Donate
TEXT AD: Call Willie – +2348098788999
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