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Banking Sector

Zenith Bank Joins Exclusive Group of One Trillion Naira Stocks as Market Capitalization Crosses Milestone

Zenith Bank’s share price experienced a notable appreciation of 3.23% from the previous week to close N32 per share to propel the bank’s market capitalization above one trillion naira to N1.004 trillion.



Zenith Bank - Investors King

In a notable milestone for the Nigerian stock market, Zenith Bank has made its way into the elite group of stocks worth over one trillion naira, known as SWOOTs (Stocks Worth Over One Trillion).

This significant accomplishment follows the bank’s recent crossing of the one trillion naira mark in market capitalization, cementing its standing among other prominent stocks.

Zenith Bank’s share price experienced a notable appreciation of 3.23% from the previous week to close N32 per share to propel the bank’s market capitalization above one trillion naira to N1.004 trillion.

The bank’s impressive performance has been underlined by a 48% increase in its share value over the past year, making it one of the top performers on the banking index.

It is worth noting that Zenith Bank is the only financial institution currently included in the prestigious group of SWOOTs, further highlighting its strength and significance within the market.

The combined market capitalization of the SWOOTs now stands at N21.560 trillion, reflecting a notable increase from the previous week’s value of N20.617 trillion.

These SWOOTs, including Airtel Africa, MTN Nigeria, Dangote Cement, BUA Foods, BUA Cement, and Zenith Bank, collectively account for 66.7% of the NGX (Nigerian Exchange) Equity market capitalization.

A closer look at the performance of each individual SWOOT reveals interesting insights.

BUA Foods Plc, for instance, maintained a stable share price of N135.75 per share, with a corresponding market capitalization of N2.44 trillion. Notably, the company reported impressive growth in its unaudited financial statement for Q1 2023, with revenue surging by 60.2% to N144.32 billion.

Also, its Profit After Tax rose by an impressive 77.1% to N40.47 billion during the same period, while Earnings Per Share (EPS) experienced a remarkable increase of 77% compared to Q1 2022.

BUA Cement Plc share price rose by 4.65% from the previous week to close at N90 per share as the market capitalization of the company expanded to N3.05 trillion. However, the company’s unaudited financial report for Q1 2023 revealed a decline in profit after tax by -19.1% to N26.80 billion.

Dangote Cement Plc, the most capitalized cement producer on the NGX, experienced a moderate gain in share price, closing at N287.5 per share after a 1.23% increase from the previous week. With a total market capitalization of N4.90 trillion, the company’s unaudited Q1 2023 financial results reported a marginal loss in revenue.

On a positive note, Dangote Cement Plc’s Profit After Tax marginally increased by N3.65 billion (1.56%) to N109.50 billion in Q1 2023 compared to the same period in 2022.

Airtel Africa Plc, on the other hand, encountered a slight setback with a -1.72% loss in share price, closing at N1266.8 per share. Consequently, the company’s market capitalization decreased by N83.43 billion, closing at N4.76 trillion.

However, Airtel Africa reported positive financial results in its audited financial report, with service revenue amounting to N980 billion ($2.128 billion) for the financial year ending March 31, 2023. This represents a growth of 20.3% compared to the previous year.

MTN Nigeria Plc experienced a depreciation of -3.10% in its share price, closing at N265.50 per share. As the most valued company on the NGX, MTN’s market capitalization declined to N5.404 trillion, losing N173.01 billion from the previous week.

Nevertheless, MTN reported a 20.6% growth in revenue, amounting to N568.14 billion, and a 4.6% increase in Profit After Tax to N101.30 billion in its unaudited financial report for Q1 2023.

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Banking Sector

Central Bank of Nigeria Postpones 293rd Monetary Policy Committee Meeting



Central Bank of Nigeria - Investors King

The Central Bank of Nigeria (CBN) has announced the postponement of its 293rd Monetary Policy Committee (MPC) meeting, originally scheduled for September 25th and 26th, 2023.

Dr. Isa AbdulMumin, the bank’s Director of Corporate Communications, released a statement on Thursday confirming the decision.

In the statement, Dr. AbdulMumin stated, “The Monetary Policy Committee of the Central Bank of Nigeria has deferred its 293rd meeting, which was initially planned for Monday and Tuesday, September 25th and 26th, 2023, respectively. A new date will be communicated in due course. We regret any inconvenience this change may cause our stakeholders and the general public.”

While the CBN did not provide an official reason for the postponement, some industry experts suggest it may be related to the pending approvals for the newly appointed governor and deputy governors of the bank.

President Bola Tinubu recently nominated Yemi Cardoso as the potential head of the CBN. Additionally, Tinubu has endorsed the nominations of four new deputy governors for the apex bank, who are expected to serve for an initial term of five years, pending confirmation by the Senate.

The nominated deputy governors are Emem Usoro, Muhammad Abdullahi-Dattijo, Philip Ikeazor, and Bala Bello. However, the appointment of the CBN governor is contingent upon Senate confirmation, which is currently on a yearly recess.

The CBN assures stakeholders and the public that the rescheduled MPC meeting date will be communicated promptly as soon as it is confirmed.

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Banking Sector

Currency in Circulation Surges by N1.7 Trillion Amidst Rising Cash Transactions



New Naira Notes

The currency in circulation in Nigeria has surged by N1.7 trillion, driven by a surge in cash transactions.

According to data obtained from the Central Bank of Nigeria (CBN), as of the end of August, the currency in circulation rose to N2.7 trillion.

This substantial increase in currency in circulation comes after a 235.03 percent dip to N982.1 billion as of the end of February 2023 from N3.29 trillion at the close of October 2022, primarily due to the naira redesign policy spearheaded by the CBN.

However, the currency in circulation began its steady ascent once the policy concluded. Cash that had been previously withdrawn from circulation to promote electronic payments was reintroduced into the economy, contributing to this significant boost.

The data obtained from the CBN reveals that a whopping N2.3 trillion was removed from circulation during this period.

The CBN defines currency in circulation as all legal tender currency in the hands of the general public and within the vaults of Deposit Money Banks, excluding the central bank’s vaults.

The CBN further elucidated its methodology, stating that it employed an “accounting/statistical/withdrawals & deposits approach” to calculate the currency in circulation in Nigeria. This approach meticulously tracks the movement of currency in circulation on a transaction-by-transaction basis.

Under this methodology, each withdrawal made by a Deposit Money Bank at one of CBN’s branches results in an increase in currency in circulation (CIC), while each deposit made by a DMB at one of CBN’s branches leads to a decrease in CIC.

This surge in currency in circulation reflects the evolving landscape of financial transactions in Nigeria and underscores the importance of flexible monetary policies in facilitating economic growth and stability.

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Banking Sector

Strong Growth in Earnings for Leading Nigerian Banks in H1 2023



Retail banking

Financial reports released by eight Deposit Money Banks (DMBs) for the first half of 2023 have showcased robust financial performances, collectively amassing N3.9 trillion in gross earnings.

These figures were recently disclosed through the financial statements published on the Nigerian Exchange Limited’s website.

Zenith Bank: Zenith Bank, in its audited results for the half-year ending on June 30, 2023, stood out with remarkable growth, posting a 139 percent surge in gross earnings. This figure soared from N404.8 billion in H1 2022 to N967.3 billion in H1 2023.

The bank also reported a 161.84 percent increase in profit after tax, reaching N291.7 billion by June 2023.

Guaranty Trust Bank (GTCO): GTCO recorded a substantial 85 percent rise in gross earnings during H1 2023, soaring to N672.603 billion from the N364.306 billion recorded in the previous year.

In its audited consolidated and separate financial statements filed with both the Nigerian Exchange Group and London Stock Exchange, the bank reported a profit after tax of N280.482 billion for H1 2023, compared to N77.557 billion in the corresponding period of 2022.

United Bank for Africa (UBA): UBA demonstrated its financial prowess with a remarkable 164 percent increase in gross earnings, reaching N981.78 billion in June 2023, compared to N372.36 billion in June 2022.

According to the bank’s audited financial report, its profit after tax surged to N378.24 billion, reflecting a staggering 437.8 percent increase over H1 2022.

First Bank: Nigeria’s oldest bank, First Bank, experienced substantial growth in gross earnings, witnessing an 82.8 percent increase to N656.6 billion in H1 2023, compared to N359.2 billion in the same period of 2022.

The bank’s profit after tax also saw significant growth, increasing to N174.9 billion in H1 2023 from N53.3 billion in the previous year.

Also, other prominent banks that recorded substantial growth in gross earnings in the first half of 2023 included Wema Bank (N89.09 billion), Fidelity Bank (N247.1 billion), Sterling Holding (N99.06 billion), and FCMB (N238.2 billion). Cumulatively, these eight banks collectively amassed N3.9 trillion in the first six months of the year.

A deeper analysis of these banks’ financial statements indicated that the impressive performance in the first half of the year was primarily attributable to the devaluation of the naira following the Central Bank of Nigeria’s decision to float the local currency.

For instance, Zenith Bank’s interest income surged by 72 percent, reaching N415.4 billion in H1 2023 from N241.7 billion in H1 2022. Additionally, trading gains rose by 21 percent to N103 billion during this period.

The growth in interest income was attributed to the impact of both the expansion and repricing of risk assets.

“The liberalization of the foreign exchange market during the period spurred the growth in non-interest income as revaluation gains improved significantly,” noted the bank.

These impressive financial performances underscore the resilience and adaptability of Nigerian banks in the face of economic challenges and changing market conditions, positioning them as key players in the nation’s financial landscape.

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