•We must address banks capital adequacy to grow economy – Tinubu’s adviser

•Investors inject N110bn in UBA, FBNH, Zenith, Access, other stocks in two days

Presidency on Tuesday expressed support for the banking sector consolidation initiative of the Central Bank of Nigeria, saying it would help the country to grow the economy to a new height.

This came barely five days after the CBN said it would ask banks to raise new capital.

According to the Presidency, it has become important to consider the capital adequacy of Nigerian banks in light of the projected $1tn economy in eight years.


Representing President Bola Tinubu at the 40th Anniversary Celebration of The Guardian Newspapers in Lagos on Tuesday, the President’s Special Adviser on Information and Strategy, Bayo Onanuga, said there would be a strong need to revisit the capital adequacy levels of banks

Onanuga said, “On the economy, that is facing all of us, our ambition to attain the $1tn appears daunting but we believe that it is achievable with God on our side and our collective determine. This explains the reason the VP and I have been on the road trying to attract huge investments into various phases of our economy; agriculture, oil and gas and others.

“To arrive at the $1tn economy, we must address the capital adequacy of our banks that will prepare the fuel for this journey.”

At the 58th annual Bankers’ Dinner last Friday, CBN Governor, Olayemi Cardoso, had said a stress test performed on Nigerian banks revealed that while they would withstand mild to moderate stress, they would be unable to service a $1tn economy projected by Tinubu in seven years, hence the need for recapitalisation.

Cardoso said, “Stress tests conducted on the banking industry also indicate its strength under mild-to-moderate scenarios of sustained economic and financial stress, although there is room for further strengthening and enhancing resilience to shocks. Therefore, there is still much work to be done in fortifying the industry for future challenges.”

He added, “Considering the policy imperatives and the projected economic growth, it is crucial for us to evaluate the adequacy of our banking industry to serve the envisioned larger economy. It is crucial to evaluate the adequacy of our banking industry to serve the envisioned larger economy. It is not just about its current stability. We need to ask ourselves, can Nigerian banks have sufficient capital relative to the finance system needs in servicing a $1tn economy shortly, in my opinion, the answer is no, unless we take action. As a first test, the central bank will be directing banks to increase their capital.”

Mega bank stocks

Meanwhile, PUNCH findings show investors have begun positioning themselves in the stocks of Tier-1 banks listed on the Nigerian Exchange Limited following the announcement of the proposed recapitalisation of the banks.

There are reports some big banks may be eyeing smaller and weaker ones in the event the proposed consolidation in the sector fuels possible acquisitions.

Meanwhile, findings showed that some listed financial institutions gained over N101.18bn on Monday and Tuesday, following the announcement of the proposed banking sector recapitalisation.

An analysis done by The PUNCH at the close of trading on Tuesday revealed that at least six of the lenders added to their market capitalisation in the two trading sessions this week, while five banks shed their value and two remained unchanged.

The lenders who gained included United Bank for Africa Plc, whose market capitalisation rose to N731.87bn on Tuesday from N713.06bn on Friday, the market cap of Zenith Bank Plc appreciated by one per cent to N1.10tn and Access Holdings Plc’s market cap rose by four per cent to close Tuesday’s trading at N639.81bn.

FBN Holdings Plc has been the biggest gainer so far as its market cap stood at N800.47bn on Tuesday from N717.91bn on Friday, marking an 11 per cent appreciation. The market cap of Sterling Financial Holdings Plc rose by 4.51 per cent to N106.81bn and the value of FCMB Group’s share rose by one per cent to N137.63bn.

The five lenders who lost during the period under review include; Guaranty Trust Holding Company (-1 per cent), Jaiz Bank (-2 per cent), Unity Bank (-8.69 per cent), Wema Bank and Stanbic IBTC Holdings (-3.08 per cent) to close with their market capitalisation at N1.13tn, N55.27bn, N19.64bn, N66.61bn and N816.29bn respectively.

The market capitalisation of two lenders, Ecobank Transnational Incorporated Plc and Fidelity Bank remained unchanged over the two-day period at N293.59bn and N288.11bn respectively.

A bank CEO, who earlier spoke to The PUNCH, welcomed the CBN policy direction regarding the recapitalisation of the banks, saying his institution was ready to raise fresh capital though it had yet to conclude the modality.

“Even before the CBN governor made the pronouncement, our bank was already considering raising fresh capital to significantly increase the capital base. This should happen in the first quarter of 2024. So, we are in tune with the CBN governor,” the CEO of a Tier-1 lender told one of our correspondents on Saturday.

In the last few months, First Bank of Nigeria Holdings, Wema Bank and Jaiz Bank have proposed Rights Issues, while Fidelity Bank has announced plans to raise additional capital via the issuance of 13,200 billion ordinary shares via public offer and rights issue. It was gathered that Wema Bank would commence its Rights Issue on December 1.

Already, players in the capital market have expressed varied views as to the capability of the market to support the proposed recapitalisation drive.

While the doyen of the Nigerian Exchange Limited, Rasheed Yusuf, in his comments, believed the local bourse could support such a major capital raise, even without the presence of foreign investors, the Managing Director of Afrinvest Securities Limited, Ayodeji Ebo, expressed doubts the capital market could support the recapitalisation.

He said, “The Nigerian capital market may not be able to fully support the recapitalisation of the banks given the market is currently been driven by domestic investors. To also achieve this, the banks must adopt technology to drive the capital raise process as we saw during the MTN public offer.

Ebo added, “We believe if the foreign exchange policy is clear and consistent in the medium term, we expect to begin to attract FPIs to the capital market.”

Meanwhile, some minority shareholders community have expressed the conditions under which they will support the financial institutions. Mr Boniface Okezie of the Progressive Shareholders Association of Nigeria, said that minority investors must do their due diligence and invest in stocks with track records.


“What we will be looking out for include those who have been paying dividends in the past, those with good capital appreciation and a good track record from their management team. How have they been communicating with shareholders when the situation was rosy or not? I have my fears and some of those banks can’t convince me, not when my money has been trapped. In the past, they have been reckless. Even those who acquired the shares of those banks did not pay compensation to shareholders and are using the assets of the bank as leverage to build up their branches. They are not paying dividends to shareholders but have created an empire. For such banks, shareholders must be on the lookout for them and this is the time to pay them back in their coins, “he said.

Source: https://punchng.com/Bank-recapitalisation-Presidency-backs-CBN-investors-rush-for-mega-banks-stocks

Beware of the Nigerian stock market. The frenzy will soon start as it was about 20 years ago. People who invested in IPOs, banks and insurance stock became scammed. By 2008, those stocks were useless. Up till now many banks have not returned to their earlier bloated stock prices.

We are back on the same circle. Just beware. Soon stock market will start rising and making unsubstantiated gains to attract investors. It is a financial scam.

Story tellers entertaining their brain dead pigs with another round of propaganda and lies…smh…hunger go kill before they get sense in burial ground

So access bank with all the acquisition is still below 700bn yet they will be bragging that they are the biggest bank in Nigeria. Capitalization and not assets or customer base is the best metrics to judge how strong a bank is. Investors who have good knowledge of the industry know which bank stocks to buy which is directly reflected in Thier stock market capitalization. Zenith GTB and Stanbic IBTC are the strongest banks in Nigeria. This recapitalization is very good and will help reposition our financial institutions.

How many 1k fit buy?

Do whatever you like but never destroy jobs you have no idea how to create. The unemployment market is already saturated.

Nice one!

Bank owners will now have to sell their dollars to recapitalise.

Naira gains!!

How?

Which investors?

I pity who invest in a nation as corrupt as Nigeria.

hmm. okay

Investors indeed.

Validated:
Beware of the Nigerian stock market. The frenzy will soon start as it was about 20 years ago. People who invested in IPOs, banks and insurance stock became scammed. By 2008, those stocks were useless. Up till now many banks have not returned to their earlier bloated stock prices.

We are back on the same circle. Just beware. Soon stock market will start rising and making unsubstantiated gains to attract investors. It is a financial scam.

Exactly what I told somebody. Many people were scammed. I didn't buy but when redeemed church were selling shares to establish dove tv I fell for it thinking church would be different. Till today I didnt hear anything about the share and Dove tv is working

This is the best time for those who bought shares about 20 years back to dispose off those shares, that's if they are willing to. Share prices will begin rising at astronomical rates, offering sellers great opportunity to cash out on their years of losses.

Ok

Hmmm

Same way Buhari's presidency backed the then CBN. Now only CBN emefiele is "suffering" for it and presidency is chilling with their stolen money.

Nigeria iropo gan iro Po gan

All this useless big grammar they be talking in the financial industry. We are not seeing any damn thing. We're is all the money going to?

Who are these investors ingesting to these banks at this time?? My guess is the profiteers of fx speculators and the bank executives. Don't let them trick you into dumping their share for you at high prices. Don't allow them lure you into making gain from you through share speculation after Cardoso has busted their bubble and trying to strain them of their gains from fx speculation. I strongly support the recapitalization, but allow them to go and recapitalize themselves from their founders wealth, their other gains and partners.

My advise for average Nigerians is not to fall for this tricks, don't buy any bank shares at this time. Let them recapitalize themselves first to avoid losing your money to merger, acquisition, or outright bought that may happen during the recapitalization process.

History of Nigeria Stock Exchange has shown that after every recapitalization of these well regulated sectors, their shares performed badly. Beware!

We hear professor of doom. Just take care of your business your children (even the one yet unborn) are counting on you.

Validated:
Beware of the Nigerian stock market. The frenzy will soon start as it was about 20 years ago. People who invested in IPOs, banks and insurance stock became scammed. By 2008, those stocks were useless. Up till now many banks have not returned to their earlier bloated stock prices.

We are back on the same circle. Just beware. Soon stock market will start rising and making unsubstantiated gains to attract investors. It is a financial scam.

H

No be you them dey talk to and na rich man pikin

Dshocker:
Which investors?

I pity who invest in a nation as corrupt as Nigeria.

Clowns in power. What will this recapitalization do for an average survivor of the jungle economy?
This admin loves textbook jargons and corporate world indices more than actual productivity and conducive business environment.

I don't know why. Once bank is mentioned the first thing that comes to my mind is Emefiele. That guy really caused a lot of trauma

Validated:
Beware of the Nigerian stock market. The frenzy will soon start as it was about 20 years ago. People who invested in IPOs, banks and insurance stock became scammed. By 2008, those stocks were useless. Up till now many banks have not returned to their earlier bloated stock prices.

We are back on the same circle. Just beware. Soon stock market will start rising and making unsubstantiated gains to attract investors. It is a financial scam.

Thank you. Anyone with as much as a dozen brain cells should know the stock market is a speculative place where people gamble on corporate businesses.
The speculative gains of Soludo capitalization still has it tales of woes. This jargon loving admin so much believes in indices. They allow production suffer and prefer to manipulate tax, interest rates, and corporate world variables.
Bandits are still beheading and taxing farmers. No solution to those.

Validated:
Beware of the Nigerian stock market. The frenzy will soon start as it was about 20 years ago. People who invested in IPOs, banks and insurance stock became scammed. By 2008, those stocks were useless. Up till now many banks have not returned to their earlier bloated stock prices.

We are back on the same circle. Just beware. Soon stock market will start rising and making unsubstantiated gains to attract investors. It is a financial scam.

Na so my funds take hang till today. Stock markets in Nigeria I don't understand them at all

hakym619:



IT IS MY 2024 GOAL TO LEARN DATA SCIENCE.







.









.









PLEASE WHO CAN HELP ME WITH FREE RESOURCES TO LEARN:

- SQL
- EXCEL
- POWER BI ?




THANKS IN ANTICIPATION.

Learn R and Python if you are interested in DS


http://inseaddataanalytics.github.io/INSEADAnalytics/

mannobi:
I don't know why. Once bank is mentioned the first thing that comes to my mind is Emefiele. That guy really caused a lot of trauma

Lol

VolleyTrekker:
These things you are doing, they re not helping the common man arrest immediate hunger challenge. The other we saw a lecturer with doctorate degree who has a nice car fighting for petrol with haggard okada men in petrol station, simply because he could no longer fuel his car so he started using his old bike to commute. Now even the old small bike, he can't fuel it in peace.

Reduce fuel price and ease stress and pain on the masses and stop all these bogus things you are saying on the news that nobody can relate with

Reducing fuel price by direct subsidy is a no no, it's not sustainable anywhere in the world anyone that want to die better die

What they should focus on is licencing mini refinery that can create competition in that sector, which will cause fall in price

Dshocker:
Which investors?
I pity who invest in a nation as corrupt as Nigeria.

make them dey play.