The full year 2018 scorecards of many banks are now with the Central Bank of Nigeria (CBN) awaiting approvals, thereafter they will berth at the Nigerian Stock Exchange (NSE) for the investing public.
Banks are required to forward their audited accounts to the Central Bank of Nigeria for approval, prior to the release of the results on the floor of the Nigerian Stock Exchange. Top on the list of lenders whose results are awaiting CBN approvals are Zenith Bank Plc, United Bank for Africa Plc and Access Bank Plc.
Zenith Bank Plc may be the earliest birds to release its full year results because the company’s Board of Directors at its meeting of January 18, 2019 approved among other things; the audited accounts of the bank for the financial year ended December 31, 2018 for onward delivery to the Central Bank of Nigeria (CBN) for approval.
The Board of United Bank for Africa Plc at its meeting of Monday, January 28, 2019 approved its financial statements for the year ended December 31, 2018 and payment of dividend to shareholders, subject to the approval of the Central Bank of Nigeria (CBN).
UBA in a notice signed by its Group Secretary, Bili A. Odum said it shall be providing the details of the results and dividend payments as well as related corporate actions to the Exchange upon the approval of the accounts by the CBN.
Also, sequel to its earlier announcement on December 31, 2018, Access Bank Plc notified the NSE that its Board met on January 28 and approved among other things the Group’s audited financial statements for the financial year ended December 31, 2018. “Following the Board approval, the said audited financial statements will be forwarded to the Central Bank of Nigeria for approval after which the Exchange will be notified of the results”, Access Bank said in a notice signed by its secretary, Sunday Ekwochi.
Going by the notice GTBank issued on January 4 at the NSE, the Board of Directors of GTBank Plc met yesterday Wednesday January 30. The Board was expected to consider the audited financial statements of the bank for the year ended December 31, 2018. Issues relating to full year dividend were also meant to be discussed at the yesterday meeting.
Stanbic IBTC Holdings Plc said that the meeting of its Board of Directors will hold today Thursday January 31, 2019. “The meeting will discuss amongst other items, the Company’s Consolidated and Separate Audited Financial Statements for the year ended 31 December 2018”. Stanbic IBTC Holdings Plc on November 19, 2018 issued a statement on the commencement of its closed period with effect from December 1, 2018, until the Company’s full year 2018 Audited Financial Statements are released.
Renaissance Capital research analysts in their report titled “Nigerian banks: 2019 outlook – slow and steady?” who are mindful of weaker earnings growth prospects, and the rise in policy uncertainty, still believe that the Nigerian banks are attractively valued, “and a share-price re-rating is merited.”
“We make relatively minor changes to our target price (TPs) across the board. We upgrade FBN Holdings (FBNH) to BUY (from Hold) on what we see as a share-price over-correction, and downgrade Access to HOLD (from Buy) on concerns about its proposed merger with Diamond. Our top picks in the sector remain Guaranty Trust Bank (GTBank), Zenith and United Bank for Africa (UBA),” RenCap noted.
“We believe 2019 will be a challenging year, especially with the tailwinds from lower impairments all but over; we do not see further asset quality improvement beyond what has already been achieved. We still do not argue a growth story for the Nigerian banks, and see no meaningful trigger for the sector in the short term. Higher interest rates are positive for earnings, but it is unlikely that the banks will achieve substantial growth, in our view. That said, we still believe share prices have declined ahead of current market fundamentals and we see varying degrees of value among the banks”, RenCap stated.
A look at the performance of some of the banking counters show that as at January 28, 2019 the share price of Access Bank Plc stood at N6.35kobo representing a year-to-date (ytd) decline of 6.6percent. Diamond Bank Plc stood at N2.10, down 3.7percent ytd; ETI Plc was up by 0.7percent this year to N 14.10. FBN Holdings lost 4.4percent of its year-open price to close at N7.60. FCBM Group Plc share price has gained 3.7percent this year to N1.96. Fidelity Bank Plc has advanced this year by 12.8percent to N2.29.
Also as at the review day (January 28, 2019) GTBank Plc share price lost 2.5percent this year to N33.60. Jaizbank Plc has gained 6percent this year to 53kobo. Sterling Bank Plc has gained 13.7percent this year to N2.16. UBA Plc lost 5.8percent of its share price to N7.25
Union Bank Plc has increased by 9.8percent this year to N6.15. At 90kobo per share, Unity Bank Plc has lost 15.9percent of its year-open share price. Wema Bank Plc share price has gained 1.6percent year to 64kobo; while Zenith Bank Plc at N22.15 lost 3.9percent of its year-open price.
Some analysts are still cautiously optimistic despite that positive investor sentiments are returning to the market. “Whilst we expect buying momentum to fizzle out on cement stocks, we foresee some buy interest in depressed Tier-1 banking stocks”, Lagos-based Vetiva Capital Research said in their January 21 note to investors.