After a remarkable trading day, which saw the NGX appreciate by 3.57%, all the tier-1 rated banks in Nigeria have now crossed the N1 trillion market capitalization mark.
The tier-1 banks in Nigeria are FBN Holdings (First Bank), Access Holdings (Access Bank), GTCO (GTBank), UBA, and Zenith Bank, collectively known as FUGAZ.
Previously, Zenith Bank and GTCO were the only banking members of the SWOOT category, which is used to describe stocks worth over N1 trillion trading on the NGX. However, other banking stocks such as Stanbic IBTC and FBNH had previously made a brief foray into this category.
On January 8, UBA appreciated by 10% to hit N1.023 trillion, a historic milestone. Unlike FBNH, which dropped back below N1 trillion one day after crossing the mark, UBA further appreciated by 9.03%, taking its market cap to N1.115 trillion today, January 9.
Today, January 9, Access Holdings (ACCESSCORP), the parent group of Access Bank, crossed the N1 trillion market capitalization level, as its stock rose by 8.39% to close at N29.70, thus taking the bank’s market capitalization to N1.056 trillion.
Also, FBN Holdings rebounded to its highest level since December 6, 2023, as its stock appreciated by 10%, reaching a market cap of N1.027 trillion.
The older members of the SWOOT category, GTCO and Zenith Bank, closed trading on January 9 with a market cap of N1.42 trillion and N1.49 trillion, respectively.
What you should know
In 2024 alone, the NGX has appreciated by about 11.26%, a remarkable figure for just six trading days. However, the tier-1 banks have achieved even more remarkable returns in 2024.
Year to date, ACCESSCORP has gained 28.3%, FBNH has gained 21.4%, GTCO has gained 19%, UBA has gained 27.1%, and ZENITHBANK has gained 22.5%.
A senior analyst at one of the top stockbroking firms commented on the topic, saying,
- “What we’re seeing in the market at the moment is largely driven by FOMO. As many people saw the returns of 2023, they are driven to make moves now.”
- “And for the banks, there’s a bit of concern with the recapitalization exercise, however, for tier-1 banks, there’s an assurance that nothing will happen to them.”
In 2023, Nigerian banks outside the stock market pulled up impressive financial performances. Albeit their financial performance was driven by record-high interest incomes off the backs of whopping interest rates.
As we anticipate the release of the fiscal year 2023 reports for these banks, analysts expect that their capital reserves will reflect the influence of robust stock performances during the fourth quarter of 2023, coupled with strong profit margins achieved throughout the year.
