CEOS of big lenders shed N34.96 billion in stock market rout

Nigeria’s economic struggles are taking a toll on business owners. The sustained market rout in the equity market has seen the biggest lenders’ CEOS shed significant value of their holdings to the tune of N34.96 billion.

The Nigeria all share index (ASI) which measures the performance of the equity market dipped 0.22 percent at the end of trading on Tuesday, reversing gains of 0.71 percent the previous day, further worsening its year to date loss to -13.91 percent.

Our analyses revealed that over the course of the year, big bank CEOS have counted losses.

Jim Ovia, CEO of Zenith Bank, in a market rout which saw the tier one lender lose 24.51 percent in market value, lost a whooping sum of N28.58 billion in total holding value (Direct + Indirect), accounting for 16 percent of a total loss of N177.41 billion in stock’s market cap year to date (YTD).

The erosion rate of his holdings slowed after the bank recorded in pre-tax gains of N111.7 billion, 4 percent growth over N107.4 billion and proposed to pay an interim dividend of 30 kobo per share for the period ended June 2019. At the end of trading on Tuesday, Zenith bank stock continued its upward move after gaining 2.35 percent.

Coming right behind Zenith bank’s CEO is Tony Elumelu, CEO of UBA with a total holding of 2.2 billion ordinary shares including direct and indirect holdings recorded a value erosion to the tune of N4.02 billion in value.

During the period under review, UBA stock fell 24.03 percent to N5.90, which saw investors in the stock lose in market value N48.48 billion. Tony Elumelu’s lose accounted for about 8.3 percent of total lose in the bank’s stock.

Oba Otudeko, Chairman of First Bank also lost in market rout YTD N1.58 billion in value on a total holding of 537.97 million ordinary shares after stock price of first bank dipped 37.11 percent during the period.

Meanwhile Access Bank’s Wigwe lost so far in market value N432.45 million on total holdings of 1.44 billion of ordinary shares both direct and indirect holdings. Access bank outperformed peers in the industry as stock dipped 4.41 percent since 2019 inception with investors losing N15.67 billion in value as market rout persist.

Olusegun Agbaje, CEO of the most capitalised bank on the exchange GTB, lost in market value N335.10 million after stock price slumped 23.37 percent YTD. Agbaje currently holds in GTB a total share of 41.62 million units.

The month of July saw banking stocks take more hit amid general market sentiments which weighed on all stocks, on the back off investors interpreting the regulation of the CBN to hold Loan to Deposit ratio (LDR) of 60 percent.

The fear in their hearts was the possibility that the new regulation could lead to banks underwriting high risk loans which could lead to further asset deterioration and destabilise the industry at a time when the regulator has limited scope for further bailout.