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Banking Sector

Combined Market Cap of Largest US Banks Jumped to Nearly $1.4T, an 80% Increase YoY

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The largest banks in the United States reported blockbuster second-quarter results after the pandemic loan losses didn’t happen and the US economy began roaring back to life. Moreover, the banks’ stock also significantly recovered since the beginning of the year, rising high above the pre-pandemic levels.

According to data presented by BuyShares, the combined market cap of JP Morgan Chase, Bank of America, Wells Fargo, Morgan Stanley, and Citigroup, as the five largest banks in the United States, jumped to nearly $1.4trn last week, showing a massive 80% increase year-over-year.

Double-Digit Growth After Hard 2020

There are several reasons why the US banks have outperformed the analysts’ estimates and turned 2021 into a year of significant recovery. First, consumer spending in the country has climbed significantly, in some sectors even beyond pre-COVID-19 levels. Second, credit quality has also improved while savings and investments have risen. Moreover, a national vaccination roll-out has allowed Americans to get back to work and start spending again.

These circumstances had a major influence on banks’ profitability driving their stock price to new all-time highs. For example, according to YCharts data, the market cap of JP Morgan Chase, as the largest bank in the United States and globally, jumped by $205bn in the last year.

In September 2020, the combined value of shares of the US megabank stood at $293.5bn. Over the next six months, this figure jumped to $465bn and continued rising. Statistics show that JP Morgan Chase’s market cap hit nearly $500bn last week, a massive 70% increase compared to January figures.

Bank of America, as the second-largest bank by market cap, witnessed even bigger growth. Over the last twelve months, the combined value of shares of the US multinational investment bank surged by $153.8bn or 73%, reaching $362.5bn last week.

Still, that was nothing compared to the stock price growth of Wells Fargo, which market cap almost doubled in this period. In September 2020, the combined value of shares of the third-largest US bank stood at $97.2bn. Statistics show this figure surged by 98% since then and hit $193bn last week.

Morgan Stanley’s Market Cap Soared by 153% YoY, the Biggest Increase Among the Top Five Banks

Although far behind the top three US banks in terms of market cap, Morgan Stanley witnessed the biggest stock price growth last year. In September 2020, the combined value of shares of the New York-based financial services corporation stood at $74.5bn. By the end of the year, this figure jumped by 55% to $115.7bn.

However, 2021 witnessed even more impressive growth. Statistics show that over the last ten months, the market cap of the fourth-largest bank in the United States surged by another $73bn and hit over $188bn last week, revealing an impressive 153% increase year-over-year.

The YCharts data revealed that Citigroup witnessed a 54% market cap growth in this period, the smallest among the top five US banks. Between January and October, the combined value of shares of the US bank jumped by $51bn or 54%, reaching $144.3bn last week.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

FirstBank’s Firstmonie Agents Processed Over N22 Trillion in Transaction Value

FirstMonie Agents have processed over N22 trillion in combined transaction value.

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Nigeria’s leading financial services provider, FirstBank of Nigeria Limited on Thursday said its fast-growing agent banking network, Firstmonie Agents, has collectively processed over N22 trillion in transaction value.

The lender, which announced a profit after tax of N53.3 billion in the first half of the year, said Firstmonie Agents processed transaction volume in excess of 1 billion across all its 180,000 agents that operate in 772 local governments.

In an effort to bring financial services to the unbanked and underbanked segment of the Nigerian society, Firstmonie Agents was the first banking network to operate in all the local government areas, except the two local governments enmeshed in insecurity.

Since its launch, FirstMonie Agent Banking has been providing convenient banking services to Nigerians previously cut off from the financial system, playing a pivotal role in deepening financial inclusion and empowering existing businesses within the communities to deliver these services.

Popularly called ‘Human ATM’, Firstmonie Agents are empowered to reduce the reliance on over-the-counter transactions while providing convenient personalized services. Amongst the services carried out by the Agents include; Account Opening, Cash Deposit, Airtime Purchase, Bills Payment, Withdrawals and Money Transfer.

Through various empowerment and reward schemes implemented to put its Firstmonie Agents at an advantage to economically impact their immediate communities whilst importantly having their business sustained, the Bank’s Agent Banking scheme has remained a toast to Nigerians, irrespective of where they are in the country. Amongst these schemes is the Agent Credit – launched in 2020 – which has had the Bank provide credit facilities to the tune of 238 billion naira to its teeming Firstmonie Agents.

Commenting on the milestone, Dr. Adesola Adeduntan, CEO, FirstBank said “since the relaunch of our Agent Banking scheme in 2018, our Firstmonie Agents have played a vital role in bridging the financial inclusion gap in the country, as many more people have been able to undertake various financial and business transactions in cost-effective ways, thereby saving a lot of time and money in travelling over long distances for basic banking services.“

“We are delighted by the giant strides of our Firstmonie Agents in promoting financial inclusion and commend them for their efforts in taking banking to the doorsteps of Nigerians – irrespective of where they are – in a very effective way”, he concluded.

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Banking Sector

Unity Bank Grows Profit After Tax by 23% to N1.6 Billion

Retail lender, Unity Bank Plc has posted gross earnings of N27.6 billion for its 2022 half-year results, representing a growth of 17% year-on-year.

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Retail lender, Unity Bank Plc has posted gross earnings of N27.6 billion for its 2022 half-year results, representing a growth of 17% year-on-year.

In its unaudited half-year financials submitted to the Nigeria Exchange Group Limited, the Bank also made significant improvements across key performance indicators.

The Bank grew Profit Before Tax (PBT) by 23% which rose to N1.8 billion from N1.5 billion in the corresponding period of 2021. Profit After Tax (PAT) for the period equally increased by 23% to close at N1.6 billion from N1.382 billion in H1’21.

The key highlights of the financial statements showed growth in interest and similar income, which rose 18% to N23.938 billion from N20.273 billion in the corresponding period of 2021, an indication of sustained growth in the loan book as well as improved earnings from the lender’s robust digital channels, arising from sustained investment in its digital payment infrastructure.

Similarly, the lender posted sustained asset growth as total assets moved up by 7% to N574.3 billion from N538.9 billion in 2021.

Other key highlights of the financial statement include a 12% growth in deposits, which rose to N359.5 billion from N322.3 billion in December 2021, a clear indication of the positive trend of the Bank’s innovative retail products targeting several segments of the retail market as well as enhanced customer acquisition strategies for emerging products rolled out to the market during the period under review.

In the same vain, the lender recorded an increase on its loan books to N303.632 billion from N269.270 billion in 2021, representing a 13% growth.

Commenting on the financial statements, the Managing Director/CEO of Unity Bank Plc, Mrs Tomi Somefun welcomed the H1’22 results. She noted that while the key performance indicators continue on an upward trajectory; PBT (23% YoY), Total Assets (7% YoY) and gross earnings (17% YoY); the outlook for our financial position has now moderated significantly looking at other fees and income lines which performance was hitherto characterised by volatilities in the operating environment.

“As the Bank aims to further grow all indices to double-digit regions in the coming years, one reassuring take from the financial position lies in the market confidence, as well as steadily growing retail and SME franchise arising from the development of products that resonate with different markets segments, which will enable the Bank to continue to operate and successfully navigate the tough operating environment, amid rising economic headwinds,” Mrs Somefun stated.

The Unity Bank boss also stated that having invested massively in technology to drive a major revamp in our digital Banking products and channels including the Unifi Mobile App, our USSD, *7799#, internet banking, etc., the major focus is to drive increased optimisation which will enable the Bank to provide electronic convenience in the way we support our teaming customers and market segments and more often change the way they transact business.

In the view of analysts, the key performance indicators showed that the market sentiments are responding positively to the strategies of the lender’s management to accelerate the growth momentum designed for the Bank.

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Banking Sector

Zenith Bank Ranked Number One Tier-1 Bank in Nigeria for the Thirteenth Year in a Row in the 2022 Top 1000 World Banks Ranking

Zenith Bank Plc has been ranked as the Number One Bank in Nigeria by Tier-1 Capital in the 2022 Top 1000 World Banks Ranking published by The Banker Magazine.

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Zenith Bank Plc has been ranked as the Number One Bank in Nigeria by Tier-1 Capital in the 2022 Top 1000 World Banks Ranking published by The Banker Magazine.

For the thirteenth consecutive year, the Bank retained its position as the number one Tier-1 bank in Nigeria with a Tier-1 Capital of $2.75 billion, emerging as the 460th Bank globally.

The ranking, which was published in the July 2022 edition of The Banker Magazine of the Financial Times Group, United Kingdom, was based on the 2021 year-end Tier-1 capital of banks globally. Zenith Bank’s financial performance for the year was underpinned by double-digit growth of 10% in gross earnings, with an improved market share in both retail and corporate sectors despite a very challenging macroeconomic environment aggravated by the COVID-19 pandemic.

Commenting on the 2022 Top 1000 World Banks Ranking, the Group Managing Director/CEO of Zenith Bank Plc, Mr. Ebenezer Onyeagwu, said: “This ranking is a testament to our resilience and doggedness as an institution despite economic headwinds and a persistent challenging macroeconomic environment. Indeed, being ranked as the Number One Bank in Nigeria by Tier-1 Capital for the thirteenth year in a row underscores our commitment to sustaining the superior performance we are renowned for and creating value for our highly esteemed customers.”

He expressed his appreciation to the Founder and Chairman of Zenith Bank Plc, Jim Ovia, CON, for his guidance and for laying the foundation and building the structures of an enduring and very successful institution; the Board for the outstanding leadership they provide; the staff, whose drive and commitment sustains the exceptional performance; and the Bank’s customers for their unflinching loyalty to the Zenith brand.

Tier 1 Capital describes capital adequacy, which is the core measure of a bank’s financial strength from a regulator’s point of view. According to the ranking, Tier 1 Capital, as defined by the latest Bank for International Settlements (BIS) guidelines, includes loss-absorbing capital, i.e. common stock, disclosed reserves, retained earnings and minority interests in the equity of subsidiaries that are less than wholly owned.

Zenith Bank’s track record of excellent performance has continued to earn the brand numerous awards, with this latest accolade coming on the heels of several recognitions, including being recognised as the Best Bank in Nigeria for three consecutive years from 2020 to 2022, in the Global Finance World’s Best Banks Awards; Best Commercial Bank, Nigeria 2021 and 2022 in the World Finance Banking Awards; Best Corporate Governance Bank, Nigeria in the World Finance Corporate Governance Awards 2022; Best in Corporate Governance ‘Financial Services’ Africa, for three consecutive years from 2020 to 2022, by the Ethical Boardroom; Best Commercial Bank, Nigeria and Best Innovation In Retail Banking, Nigeria in the International Banker 2022 Banking Awards; and Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020. Also, the Bank emerged as the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2020 and 2021, and the Retail Bank of the year at the BusinessDay Banks and Other Financial Institutions (BOFI) Awards 2020 and 2021.

Similarly, Zenith Bank was honoured as Bank of the Decade (People’s Choice) at the ThisDay Awards 2020 and emerged winner in four categories at the Sustainability, Enterprise, and Responsibility (SERAS) Awards 2021, carting home the awards for “Best Company in Reporting and Transparency”, “Best Company in Infrastructure Development”, “Best Company in Gender Equality and Women Empowerment”, and the coveted “Most Responsible Organisation in Africa.

 

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