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Investors lose N36 billion in Access Bank, UBA, GTCO as sell pressure intensifies

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Investors in the three banks lost nearly N35.523 billion at the end of trading on August 18 as a result of sell pressure seen on shares of Access Holdings Plc, GTCO Plc, and UBA Plc over the course of six trading days.

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Nairametrics’ checks revealed that UBA Plc lost 2.78% to N7.00 per share from a share price of N7.20 at the start of the current year’s trading on August 11 while Access Bank Plc lost 6.70% to N8.35 per share from N8.95 which was the starting share price.

GTCO Plc lagged with a drop of 1.22%, from N20.55 per share during the reviewed period to N20.30 per share.

This is just as investors in the stock market are hoping that the impending release of the half-year 2022 results of these nation’s leading banks will see an improved performance on various parameters like credit growth, asset quality, and profitability.

The relentless sell pressure by Foreign Portfolio Investors (FPIs) is on the back of high commodity inflation due to the Russian-Ukraine War, which led to a spike in interest rates and, in turn, led to a jump in bond yields in the US and other developed markets.

Foreign institutional investors invest in Nigeria stocks or other emerging markets when they have excess liquidity (low borrowing costs). However, if bond yields rise in the US, money will move away from emerging markets.

 

Following low sentiment from FPIs analysis from the NGX has shown that foreign transactions stood at N201.29 billion, accounting for about 13.37 per cent of the total transactions carried out from January to May, while domestic transactions constituted N1.304 trillion, representing 86.63 per cent of the total transaction, outperforming the foreign investment during the same period.

Performance of the banks’ share prices

  • Access Holding closed its last trading day (Thursday, August 18, 2022) at N8.35 per share and N296.802 billion in market capitalisation on the Nigerian Stock Exchange (NGX) as against N8.95 per share and N318.129 billion in market capitalisation at the beginning of trading on August 11, hence has earned a loss of N21.327 billion or 6.70%.
  • GTCO Plc also closed its last trading day (Thursday, August 18, 2022) at 30 per share and N597.452 billion in market capitalisation on the Nigerian Stock Exchange (NGX) in contrast to the opening figure of N20.55 per share and N604.810 billion in market capitalisation at the beginning of trading on 11th August. The bank has since lost 1.22% and N7,357 billion in market capitalisation.
  • UBA Plc also closed the last trading day at 00 per share and N239.395 billion in market capitalisation compared to the opening figure of N7.20 per share and N246.235 billion in market capitalisation, hence has earned a loss of N6.839 billion 0r 2.78%.

Key results highlights

  • Access Holdings Plc Q1 2022 financial result revealed a profit of N57.40 billion in Q1 2022. This reflects a 9.23% increase year on year.
  • The group also reported earnings per share of N1.63, a 9.40% growth from the N1.49 reported a year earlier in Q1 2021. Access Bank Plc has grown its Q1 profits by 160% in 4 years since hitting N22 billion in Q1 2018 with the profit now touching roughly N57.40 billion.
  • The statement revealed that in Q1 2022, Net interest income declined by 7.03% from N93.96 billion to N87.36 billion in the current period. Access Holdings’ profit performance is on the back of margin growth as income from interest, foreign exchange gains and fees and commission income all appreciated year on year.
  • Guaranty Trust Holding Co Q1 2022 financial result showed a profit of N43.21 billion during the period. This reflects a 5.13% decline year on year.
  • The bank also reported earnings per share of N1.51, a 5.63% drop from the N1.60 reported a year earlier in 2021.
  • The statement revealed that in Q1 2022, Net interest income grew by 9.09% from N52.43 billion to N57.20 billion in the current period. Guaranty Trust’s profit performance is on the back of margin growth as income from interest and fees and commission income appreciated year on year. However, net trading income declined y-o-y by 5.03%, subduing bottom-line profit, as well as other expenses.
  • United Bank for Africa Plc Q1 2022 financial result, which showed a profit of N41.50 billion during the period. This reflects an 8.76% growth year on year.
  • Earnings per share for the period was reported as N1.14, a 9.62% increase from the N1.04 reported a year earlier in 2021.
  • The report revealed that in Q1 2022, Net interest income grew by 14.10% from N74.38 billion to N84.87 billion in the current period. UBA’s profit performance is on the back of all margin growth as income from interest, trading income and fees and commission income all appreciated year on year.
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