One of Nigeria’s oldest banks, FBN Holdings, had its share price exceed the N1 trillion market value threshold on Wednesday.
This comes after the share price soared this week with back-to-back increases of over 10%. reaching the market capitalization of N1 trillion.
FBNH now officially joins the SWOOTs, an acronym for Stocks Worth Over One Trillion Market Capitalization.
Other members of rhetorical SWOOT include Dangote Cement, Airtel Africa, MTN and BUA Cement. Also included are BUA Foods, Seplat and most recently Zenith Bank and GTCO.
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The rise in FBN Holdings began in 2022 with the announcement by billionaire investor Femi Otedola that he had acquired a controlling stake in the bank. Following the announcement, investors went into a frenzy, scurrying to get their hands on the equities.
The fact that FBNH was trading for less than N6 a share at the time shows that it has increased four times since the billionaire disclosed his purchase of the company.
Femi Otedola’s acquisition of companies is often synonymous with improved market perception for stocks leading to higher valuations. This happened with Forte Oil when the share price also surged in 2014. The same also happened with Transcorp when he made the announcement early in the year that he had purchased a significant stake.
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The billionaire power company, Geregu Power is also close to hitting the N1 trillion market capitalization mark.
According to the group’s financial statements for nine months, the company’s profit after tax (PAT) was N236.4 billion, a 159,2% increase from the N91.2 billion recorded in the corresponding period in 2022
The company posted a net interest income of N377.0 billion, up 51.4% y-o-y as against N249.5 billion recorded in 2022.
The group’s non-interest income stood at N326.9 billion, up 108% y-o-y from (Sep 2022: N157 billion).
Operating expenses were N352.3 billion, up 33.3% y-o-y (Sep 2022: N264.3 billion).
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Nnamdi Okonkwo, the Group Managing Director commented: “Over the period, we have delivered a strong performance and growth enabled by focused execution of our strategic plans. Gross earnings were up by 80.1%, while our profit before tax grew by 156% year-on-year. At the same time, our credit risk portfolio remains healthy, with an NPL ratio of 4.6% and a coverage of 85.4%. Cost to cost-to-income ratio improved to 50% from 65% in 2022 on the back of enhanced revenue generation as well as effective cost-containment initiatives despite the high inflationary environment.”
Commenting on the results, Dr Adesola Adeduntan, Chief Executive Officer of First Bank of Nigeria Limited (Commercial Banking Group) stated that:
“In the nine months ended September 30, 2023, FirstBank Group reported impressive financial results, reflecting sustained growth and resilience of the franchise. Our gross earnings at the end of the quarter were N922.2 billion, marking a remarkable increase of 79.8% year-on-year”.
