Market Cap of UK’s Three Largest Banks Slumped by $75B in a Year
The COVID-19 pandemic has hit the European banking system hard, with many of the largest banks coping much worse with the crisis than their US peers. While the US financial giants managed to boost their investment banking and trading revenues and better position themselves in times of economic uncertainty, major European banks all reported huge losses in 2020, causing their market cap to plunge deep below 2019 levels.
According to data presented by BuyShares, the combined market capitalization of HSBC Holdings, Lloyds Banking Group and Barclays, as the three largest UK banks, hit $184bn last week, almost a $75 drop year-over-year.
Europe’s Largest Bank HSBC Lost $46.4B in Market Capitalization
Europe’s largest bank by assets, HSBC, has suffered significant losses amid the COVID-19 crisis. The Group’s earnings report revealed revenues for the nine months of 2020 amounted to $38.7bn, a 9% drop in a year, primarily due to the progressive impact of interest rate reductions across its global businesses. Reported profit after tax plunged by 62% to $5.2bn between January and September 2020.
In December 2019, the market capitalization of the London-headquartered financial giant stood at $160.1bn, revealed Yahoo Finance data. During the next three months, this figure dropped to $114bn.
The noticeable decreasing trend continued in the following months, with the market capitalization falling to $78.9bn in September, a 50% plunge since the beginning of 2020. Statistics indicate the combined value of HSBC’s stocks stood at $113.8bn last week, a $46.4bn drop in a year.
Lloyds Banking Group Witnessed the Biggest Market Cap Plunge
The Yahoo Finance data revealed that Lloyds Banking Group, as the second-largest bank in the United Kingdom, witnessed the most significant drop in the market capitalization amid the COVID-19 crisis, with the figure falling from $57.4bn in December 2019 to $34.8bn last week, almost a 40% plunge in a year.
After putting aside £2.4bn for bad debts, Britain’s biggest high street lender reported a loss of £676 million in the second quarter of 2020. The negative trend continued in the third quarter of 2020, with the net profit plunging by 19% YoY to £3.4bn. The Group’s earnings report revealed that the net profit in the nine months of 2020 amounted to £10.8bn, 17% less than the same period in 2019.
Barclays lost almost $5.5bn in market capitalization amid the COVID-19 crisis. In December 2019, the combined value of stocks of the UK’s third-largest bank by assets stood at $40.8bn. Statistics show this figure dropped by 13%, landing at $35.3bn last week.
Equities Market Closes in Red on Monday
The Nigerian Exchange Limited extended its bearish trend on Monday as several unclear economic policies continue to dictate market sentiment.
Investors traded 209,212,596 shares estimated at N1.763 billion during the trading hours of Monday.
Market value of listed equities dipped to N20.089 trillion on Monday, while the Nigerian Exchange Limited All-Share Index lost 0.27 percent 38545.30 index points.
Meyer Plc led gainers with 8.77 percent to close at N0.57 a share. This was followed by Champion Brew. Plc with 6.06 percent. See the details below.
|MEYER||N 0.57||N 0.62||0.05||8.77 %|
|CHAMPION||N 1.98||N 2.10||0.12||6.06 %|
|JBERGER||N 19.10||N 20.00||0.90||4.71 %|
|REGALINS||N 0.50||N 0.52||0.02||4.00 %|
|IKEJAHOTEL||N 0.94||N 0.97||0.03||3.19 %|
|FIDSON||N 5.10||N 4.60||-0.50||-9.80 %|
|LASACO||N 1.50||N 1.36||-0.14||-9.33 %|
|FTNCOCOA||N 0.33||N 0.30||-0.03||-9.09 %|
|MBENEFIT||N 0.45||N 0.41||-0.04||-8.89 %|
|CORNERST||N 0.58||N 0.55||-0.03||-5.17 %|
FG To Auction Three Bonds Worth 50B Each This Week
The Debt Management Office has said that the Nigerian government will offer N150 billion bonds for subscription in June.
The bonds comprised three bonds worth N50bn each, a circular said Friday.
The DMO said the bonds will be auctioned on June 23 and all three have the same date for settlement.
The bonds are a 10-year re-opening bond to be offered at the rate of 16.2884 percent and to mature in March 2027; a 15- year re-opening bond to be offered at 12.5 percent with the maturity date of March 2035; and a 30-year re-opening bond to be offered at 12.98 percent and mature in March 2050.
FGN Bonds are “backed by the full faith and credit of the Federal Government of Nigeria”, the DMO said, adding that they are equally charged upon the general assets of Nigeria.
The debt office explained further that FGN bonds qualified as liquid assets for liquidity ratio calculation for banks.
For re-openings of previously issued bonds where the coupon is already set, the circular said successful bidders would pay a price corresponding to the yield to maturity bid that cleared the volume being auctioned, plus any accrued interests on the instrument.
Last month, the DMO offered similar bonds of N150bn bonds for a subscription which comprised three bonds worth N50bn each.
NGX Suspends Trading in GTBank’s Shares Ahead of Guaranty Trust Holding Listing
The Nigerian Exchange (NGX) Limited last Friday placed a full trading suspension on the shares of Guaranty Trust Bank(GTBank) Plc.
According to the NGX, the suspension was necessary to prevent trading in the shares of the bank in preparation for the eventual delisting of GTBank to pave way for the listing of the holding company(Holdco), Guaranty Trust Holding Company Plc on NGX.
Shareholders of the GTBank had ratified the plan to adopt a Holdco structure and the Group Managing Director of the bank, Mr. Segun Agbaje, had told them the development would see a new corporate entity, Guaranty Trust Holding Plc, take the place of GTBank on the London and Nigerian Stock Exchanges.
He explained that change would entail a 1:1 share transfer while the Holdco would serve as the parent company and corporate center for GTBank Nigeria, all GTBank African subsidiaries and all other new businesses that will be created following the transition.
“Our transition into a Holdco is a necessary step to future-proofing our leadership position, sustainably growing our earnings and achieving our long-term goal of becoming one of the top five financial institutions in Africa. It is also a critical part of our response to the seismic shifts in customer expectations and changes in business models,” Agbaje had said.
He noted that as a Holdco, they will compete more effectively with non-banks in the new competitive landscape; pairing their strength in financial services with an aggressive focus on creating value in every aspect of their customers’ lives.
“We will create a new payments business to deliver the innovative solutions that will deepen and extend digital financial services across Africa. We also believe that we are in a better position to drive an asset management business and a pension fund business, given our strong retail base and digital-first approach to financial services, which we have honed over the past decade. Taken together, our entry into these new growth areas will allow us to maximize our potential in a way that banks were restricted from and enhance the value we create as a platform for enriching lives,” he said.
According to him, following a decade of birthing innovative ideas and nurturing them into businesses, the Holdco structure would he bank to unleash the power within, in ways that allow us to thrive in spaces banks were excluded, build out the full value of the innovations they have nurtured over the years and deepen the value we can create stakeholders.
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