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Nigerian Stock Market Closes Lower on Wednesday

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Stocks
  • Nigerian Stock Market Closes Lower on Wednesday

The Nigerian Stock Exchange continued its bearish trend on Wednesday despite listed companies releasing their financial results for the first half of the year.

The All-Share index declined by 0.07 percent from 29,395.14 it closed on Tuesday to 29,375.25 points on Wednesday.

Market capitalisation of listed equities dropped from N12.957 trillion to N12.948 on Wednesday, a decline of N9 billion.

The year-to-date loss rose to 6.54 percent on Wednesday.

The broad negative sentiment was as a result of selloffs, especially within the low-cap stocks. A total of 23 stocks closed in the red, while only 16 closed with gains.

Sectoral break down showed the oil & gas sector and the banking sector declined by 0.7 percent and 0.6 percent, respectively.

While industrial goods and insurance sectors inched higher by 1.7 percent and 0.5 percent, respectively.

11 Plc, the former Mobil Nigeria Plc, led losers’ chart with a decline of N17 to close at N158 a share.

Closely trailed by Dangote Cement with a decline of N2.90 to close at N177.

Analysts at Afrinvest Securities said: “Market performance was bearish and we expect this to be sustained in subsequent sessions as investor sentiment stays soft. However, we do not rule out the possibility of some end of the week bargain hunting as investors take advantage of attractive market prices.”

Total shares of 237.71 million valued at N1.98 billion were exchanged in 4,113 transactions.

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.

Banking Sector

UBA Grows Profit by 26.8 Percent to N38.2 Billion in Q1 2021

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UBA

The United Bank for Africa (UBA), one of Africa’s leading financial institutions, reported a 26.8 percent increase in profit after tax from N30.1 billion in the first quarter (Q1) of 2020 to N38.2 billion in the first quarter of 2021.

In the unaudited financial statements released on Monday, UBA grew gross earnings by 5.5 percent to N155.4 billion in Q1 2021, up from N147.2 billion filed in Q1 2020.

The lender leverage on growth in interest income and non-interest income as net interest income grew from 65.417 billion in the corresponding period of 2020 to N74.381 billion in Q1 2021.

Total non-interest income stood at N32.247 billion in the quarter, up from N28.527 billion achieved in Q1 2020.

Similarly, operating income expanded from N93.944 billion in the first quarter of 2020 to N106.648 billion in the first quarter of 2021.

However, operating expenses grew to N64.454 billion in Q1 2020, up from N58.657 billion in Q1 2021.

Profit before income tax rose to N40.581 billion in Q1 2021 from N32.726 billion in Q1 2020.

Speaking on the bank’s performance the Group Managing Director/CEO, UBA Plc, Mr. Kennedy Uzoka, said: “This impressive 2021 Q1 results reflect the capacity of our business to sustainably grow earnings even in a highly uncertain macroeconomic environment. We remain upbeat on the macroeconomic outlook of the countries in which we operate, especially as the COVID-19 vaccine distribution gains traction globally, whilst commodity prices and currencies continue to stabilise. Our robust capital and liquidity positions have positioned us to continue to support our customers across diverse sectors and markets, guided by prudent risk management practices.”

Uzoka also explained the lender’s efforts at executing its priorities for the year 2021, as it continues to leverage people, processes, and technology to deliver the best customer experience across all its channels and touchpoints.

The bank is making strong progress in Nigeria where our continuous market share and efficiency gains are translating into higher profits. We are committed to sustaining this strong start throughout the year, leveraging our customer-First (C-1st) philosophy and unparalleled execution to deliver even stronger returns to our esteemed shareholders in 2021 and beyond;” Uzoka said.

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Banking Sector

GTBank Reports 8 Percent Decline in Profit Before Tax to N53.7 Billion in Q1 2021

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GTBank

Guaranty Trust Bank on Wednesday reported a 7.8 percent decline in profit before tax from N58.2 billion in the first quarter of 2020 to N53.7 billion in the first quarter of 2021.

The lender disclosed in its unaudited results titled ‘GTBank releases Q1 2021 unaudited results’.

Deposit liabilities rose by 3 percent to N3.717 trillion in the first quarter of 2021, up from N3.61 trillion in December 2020. The bank’s loan book declined by 1.4 percent to N1.639 trillion, down from N1.66 trillion posted in December 2020.

Speaking on the financial results, the Managing Director/Chief Executive Officer, Guaranty Trust Bank Plc, Mr Segun Agbaje, said, “We have started off the 2021 financial year on a fair footing, and our first-quarter results demonstrate our ability to continue delivering strong and sustainable returns, despite the macroeconomic uncertainties that persist in our business environment.

“This is a reflection of the resilience of our franchise, our prudent approach to risk management and the efficacy of our digital-first customer-centric business strategy.”

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Banking Sector

Unity Bank Posts N2.09 Billion Profit Despite N4 Billion Revaluation Loss in 2020

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Unity bank

Unity Bank Plc, one of Nigeria’s leading financial institutions, grew profit after tax to N2.09 billion in the financial year ended December 31, 2020.

The lender profit before tax stood at N2.22 billion in the year under review while assets rose by astonishing 67.90 percent from N293.05 billion in 2019 to N492.02 billion in 2020.

In the audited financial statements released on Monday, Unity Bank grew its gross loan portfolio by 92.9 percent from N106.9 billion recorded in December 2019 to N206.2 billion in December 2020.

The almost 100 percent jumped in credit provision highlighted the bank’s strategy at deepening support for farmers, improving food security and enhancing new job creation for thousands of youths and entrepreneurs.

During the bank’s earnings call on Monday, Mr. Kolawole Ebenezer, the Executive Director and Chief Financial Officer, Unity Bank Plc, explained that the bank has been able to cut down on its Non-performing loan to near-zero percent by adopting a strategy that allows the lender to focus on farmers and at the same time implement strategy that mitigates security challenges.

Unity Bank grew its net operating income by 9.71 percent to N25.46 billion in 2020, up from N23.21 billion in the corresponding period of 2019. Similarly, net interest income rose by 7.60 percent to N17.75 billion in 2020 from N16.49 billion in 2019 while earnings per share stood at 17.85 kobo.

In spite of COVID-19 disruption, Unity Bank grew customers’ deposit portfolio by 38.4 percent to N356.62 billion, up from N257.69 billion filed in 2019. This indicates market acceptance of the bank’s product offerings and series of technological integration launched during the year under review to ease banking challenges, especially as the world struggles with the COVID-19 pandemic.

Bismarck J. Rewane, the Managing Director and Chief Executive Officer of Financial Derivatives Company Limited, who spoke during the earnings call on Monday, said Unity Bank is operating like a tier I bank despite its obvious limitations and highlighted the broad-based growth the bank has recorded in recent years.

The economic think tank further explained that if the bank’s N4 billion revaluation loss is added to profit after tax declared, the bank would have declared N6 billion. This does not include the adjustments made by the Central Bank of Nigeria to the interest rate charged on agric loans that eroded interest income on loans by over 30 percent.

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