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Nigerian Banks Loss N372B in Equities

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Nigerian Exchange Limited - Investors King

Banking stocks suffered the most among 25 top losers in the equities’ market as share price decline left investors with a net capital loss of N372 billion.

There were 10 banking stocks among the top 25 that lost 30 per cent and above in the past eight months. Some of the top losers recorded as much as 60.1 per cent in equities price reduction.

Conversely, only one banking stock made the few top gainers’ within the period. Altogether, there are 15 banking stocks quoted on the Nigerian stock market.

Three other banking stocks recorded various gains, while a bank dropped by 12.3 per cent.

Investors in banking stocks have suffered the highest losses with nearly three-quarters of quoted banking stocks running with double-digit losses. Losses in the banking sector generally significantly outweighed the overall market’s average loss, according to data review by The Nation.

The benchmark indices for the Nigerian stock market indicated eight-month average decline of 3.64 per cent, equivalent to a loss of N372 billion. Aggregate market value of all quoted companies on the Nigerian Stock Exchange (NSE) closed August at N9.479 trillion as against its year’s opening value of N9.851 trillion. The All Share Index (ASI), which tracks prices at the Exchange, dropped to 27,599.03 points by the month-end as against its year’s opening index of 28,642.25 points.

Banking stocks were deep in the red with the troubled Skye Bank leading the top 25 losers with year-to-date loss of 60.13 per cent. The Central Bank of Nigeria (CBN) had sacked the board and management of Skye Bank over corporate governance issues. Diamond Bank followed with a loss of 54.35 per cent. Other top losers in the banking sector included Ecobank Transnational Incorporate, -31.3 per cent; Fidelity Bank, -40.67 per cent; Sterling Bank, -49.18 per cent; Union Bank of Nigeria, -39.13 per cent; Unity Bank, -30.36 per cent; Wema Bank, -34.0 per cent; FBN Holdings, -40.53 per cent and FCMB Group, which market value had dropped by 39.64 per cent. Stanbic IBTC Holdings meanwhile dropped by 12.3 per cent within the period.

While consolidation, steep price declines and emergence of highly capitalised non-bank stocks such as Dangote Cement had reduced the hitherto overwhelming dominance of the market by banking stocks, banking stocks still account for some 25 per cent of the total market value of the Nigerian equities market.

Head, financial advisory group, GTI Capital Group, Mr. Kehinde Hassan, said the negative performance of the banking sector was weighing heavily on the overall market performance.

He noted that the unstable policy environment and the knee-jerk approach of the Central Bank of Nigeria (CBN) to regulatory decisions have compounded the tough operating environment for banks, many of which had warned of lower earnings due to the headwinds.

Only Guaranty Trust Bank (GTB) ranked within the top gainers’ list with 8-month gain of 45.76 per cent. United Bank for Africa (UBA) meanwhile posted a heartwarming return of 28.7 per cent. Access Bank followed with 14 per cent while Zenith Bank, against all expectations, trailed with a modest gain of 6.05 per cent.

Other top losers for the period included Livestock Feeds, -33.1 per cent; UACN Property Development Company, -42.5 per cent; Honeywell Flour Mills, -35.12 per cent; Vitafoam Nigeria, -43.99 per cent; AIICO, -30.77 per cent; Union Homes and Savings, -39.24; Fidson Healthcare, -32 per cent; GlaxoSmithKline Consumer Nigeria, -45.88 per cent; Berger Paints, -31.1 per cent; Cement Company of Northern Nigeria, -35.8 per cent; Lafarge Africa, -40.1 per cent; Portland Paints and Products Nigeria, -53.2 per cent; Forte Oil, -47 per cent; Tourist Company of Nigeria, -43.1 per cent and Caverton Offshore Support Group, which lost 40.9 per cent.

Nigerian equities have writhed under sustained losses in the past 32 months. Aggregate market value of all quoted equities on the NSE closed 2015 at N9.851 trillion as against its opening value of N11.478 trillion for the year, representing a loss of N1.627 trillion. The ASI indicated a negative full-year average return of -17.36 per cent. The ASI closed 2015 at 28,642.25 points as against its opening index of 34,657.15 points.

The losses in 2015 worsened the downtrend that had in 2014 marked out Nigerian equities among the worst-performing stocks globally with average full-year decline of 16.14 per cent. Aggregate market value of all quoted equities had closed 2014 at N11.478 trillion as against its opening value of N13.226 trillion for the year, indicating a loss of N1.75 trillion during the year.

Altogether, investors have lost more than N3.75 trillion in the past 32 months as the stock market groaned under political tension, steep decline in crude oil prices, foreign exchange crisis, uncertain policies and other domestic and global macroeconomic concerns.

The second half of 2016 has however seen considerable share price recovery compared with the steep losses in the first half. In the first quarter alone, Nigerian equities had recorded a net loss of N1.15 trillion.

Notwithstanding the negative overall market situation, many stocks have posted substantial returns so far this year. Dangote Flour Mills, which saw the reemergence of Aliko Dangote’s Dangote Industries Limited as the core investor, recorded the highest gain of 240.7 per cent. E-Tranzact followed with a gain of 97.4 per cent. United Capital returned 74.8 per cent while Total Nigeria posted eight-month return of 63.3 per cent. Other top gainers included Presco, 37.2 per cent; AG Leventis, 43.6 per cent; Union Dicon Salt, 39.3 per cent; Neimeth International Pharmaceutical, 32.6 per cent; DN Meyer, 30 per cent; Seplat Petroleum Development Company, 49.4 per cent; Eterna, 33.7 per cent and RAK Unity, a second-tier stock that posted a year-to-date return of 61.3 per cent.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Finance

Unity Bank Partners RIFAN Mega Rice Pyramid Display, Pledges More Support for Farmers

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Unity bank - Investors King

Agric-focused lender, Unity Bank Plc has partnered Nigerian rice farmers under the aegis of Rice Farmers Association of Nigeria, RIFAN to unveil a mega rice pyramid on the occasion of the National Rice Festival held in the Federal Capital Territory, Abuja on Tuesday.

The event, which coincided with the flag-off of the dry season farming, was used to showcase the gains produced by rice farmers in driving self-sufficiency in rice production through the Central Bank of Nigeria’s Anchor Borrowers Programme, ABP.

Speaking to newsmen at the event, the Managing Director/Chief Executive Officer of Unity Bank, Mrs. Tomi Somefun, while going down memory lane on the support of the rice farmers by the Bank since the inception of the Anchor Borrowers Programme, ABP commended the rice farmers for their unwavering belief and collaboration in the implementation of the intervention programme, adding that as the PFI (Preferred Financial Institution) for the ABP transactions, the Bank will continue to support the farmers and ensure that more smallholder farmers get the requisite financial support to boost rice production.

She said: “Our strategic partnership with RIFAN started in 2018 when we financed about 273,000 smallholder farmers. This was the largest single-ticket transaction in that year. This financing cut across 33 states of the Federation including the FCT.

“In 2019, the Bank increased the tally by financing another 146,810 smallholder farmers for the wet and dry season farming. This funding cut across 35 States of the Federation including the Federal Capital Territory (FCT).

“Additional funding was granted to finance additional 221,450 smallholder farmers of the Association across the 32 states of the Federation including FCT for the wet season and additional 300,000 hectares was financed in sixteen states for the 2020 dry season cropping season.

“As of March 2021, the Bank has financed no fewer than 190,000 smallholder rice farmers across 35 states including the FCT, Abuja.”

Speaking further, she said: “The rice pyramids we see here today is an example of the resilience of the farmers and should be replicated in all states with a focus on the crop they have a competitive advantage.

“As we gear the programme towards deepening its penetration to reach more farmers, we encourage all beneficiaries of the Intervention Programme to always utilize the inputs judiciously in order to key into Federal Government’s goal of attaining food sufficiency, diversification of the economy from oil, job creation for the teeming youth and poverty reduction”.

“We remain optimistic that RIFAN under the able leadership of the National President, Aminu Goronyo, will continue to engage its members to drive higher performance under the ABP.”

Through the strategic initiative of the ABP, Nigeria has made incredible gains in rice production over the past six years raising production to significant levels.

Official reports show that from an average yield of 1.8 metric tonnes per hectare in the pre-ABP era, the initiative has increased the country’s average yield per hectare for rice paddy and maize to about five metric tonnes per hectare.

Similarly, the average capacity utilisation per annum of domestic integrated rice mills has jumped to 90 per cent, from the 30 per cent that was the case in the era preceding the advent of the ABP.

Statistics show that there has been a significant reduction in the country’s rice import bill, from a monstrous $1.05 billion prior to November 2015, to the current figure of $18.50 million, annually. The programme has also created an estimated 12.3 million direct and indirect jobs across the different value chains and food belts of the country.

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Consumer Loans Hit N2trn, CBN Attributes Rise to Improved Credit Appraisal by Banks

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bank loans

The Central Bank of Nigeria, CBN has disclosed that the volume of consumer loans has risen to two trillion naira as recorded in October, 2021.

It stated that the increase has been persistent since last year, rising by 37 percent, year-on-year, YoY. In October, 2020, the value of consumer loans recorded was N1.47 trillion.

CBN, however, attributed the increase to improved credit appraisal and the various products offered by banks and other lenders in rendering their services.

The CBN data stated that, “monthly economic report for October, 2021, showed that the growth in consumer loans was driven by a 52 per cent, YoY increase in personal loans, which rose to N1.57 trillion in October 2021. 

“Consequently, the share of personal loans in the total consumer loans basket rose to 78 per cent in October 2021 from 70.4 per cent in October 2020.”

On the month-on-month (MoM) record, consumer lending moved from N1.94 trillion in September 2021 to N2 trillion in October 2021– an increase of 3.4 per cent.

The CBN noted that the continuous growth in personal loans increased consumer credit outstanding. The personal loans are from credit appraisal and diverse products by banks. 

“Total consumer credit extended by the Other Depository Corporations (ODCs) grew by 3.4 per cent to N2,009.88 billion at the end of October 2021, from N1,942.87 billion at the end of September 2021. 

“The ratio of consumer credit to the total credit to the private sector in October 2021 was 8.7 per cent, the same share as in the preceding month. 

“A disaggregation of consumer loans revealed that personal loans maintained their dominance, accounting for 78.0 per cent, increasing by 2.3 percentage points, above the level in the preceding month, while retail loans accounted for the balance of 22.0 per cent,” the CBN data stated.

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Banking Sector

We Are Not Affiliated With Access Capital Investment Platform, Access Bank Warns

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Access bank

The management of Access Bank Plc has issued a disclaimer in respect of the Access Capital Investment Platform which has been circulating.

The bank, which dissociates itself and its subsidiaries from the investment platform noted that the online investment entity has been soliciting members of the public to invest in its Access Capital Investment products promising mouth-watering returns on investment.

“By this disclaimer, Access Bank Plc wishes to dissociate itself, affiliates, subsidiaries and/or proxies from the activities, contract, claims or business engagements of Access Capital Investment Platform”, the bank said.

The bank further stressed that “Access Capital Investment Platform is not an affiliate nor subsidiary of Access Bank Plc and it would be at the risk of anyone who invests in any of the Access Capital Investment packages/products, as Access Bank Plc would not be responsible for any loss, damages, refund whatsoever that may arise therefrom”.

According to Access bank, relevant law enforcement and regulatory agencies have been notified of this disclaimer.

Investors King reports that there are lots of fake investments platforms in Nigeria. These platforms offer unsuspecting members of the public investments return that are too good to be true.

Most times, they offer fake – but often convincing – opportunity to make a profit after they hand over a sum of money. They pretend to be representing a legitimate and trusted investment group and pressurize their victims into making a rushed decision.

Usually, these fraudsters use platforms such as Facebook, Instagram and Twitter to lure people into investing in cryptocurrencies, foreign exchange and binary options and often have convincing social media profiles or websites with fake reviews. Some of them even pay people to write fake reviews for them.

Recall that Investors King had earlier reported that the Minister of Humanitarian Affairs, Disaster Management and Social Development, Hajiya Sadiya Umar Farouq warned the beneficiaries of the N-Power scheme not to participate in any unverified investment scheme.

She had noted, in a statement, that the ministry is aware of the current fraudulent investment scheme trending on social media and therefore, urged N-power beneficiaries not to fall victim.

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