Banking stocks sustain sliding profile on exchange
Investors’ lose N125b in five trading days
At the end of transactions last week Friday, banking stocks sustained sliding profile on the Nigerian stock Exchange, especially the shares of the suspended banks, just as investors’ lose N125 billion in five trading days.
Specifically, the market capitalisation, which stood at N9,552 trillion when the market reopened for transactions last week Monday, closed at N9,427 trillion, shedding N125 billion or 1.3 per cent.
Also, the All share index, which opened at 27,812.06 on Monday, depreciated by 361.15 to close at 27,450.91 on Friday.
On the losers’ chart on Friday, two banking stocks, Wema Bank and First City Monument Bank led the chart with 4.48 and 4.42 per cent to close at N0.64 and N1.08 per share. FBN holding shed 2.26 per cent to close at N3.03 per share.
Access Bank lost 1.23 per cent to close at N5.60 per share. Sterling Bank depreciated by 0.97 per cent to close at N1.02 per share. United Bank for Africa also dropped 0.22 per cent to close at N4.44 per share.
The Central Bank of Nigeria, on Tuesday, barred nine commercial banks from all foreign exchange transactions and operations due to non-remittance of $2.12 billion belonging to the nation’s oil corporation, the Nigerian National Petroleum Corporation (NNPC) into the Treasury Single Account
The apex bank explained that it was forced to impose the ban for the refusal of the banks to remit the outstanding sum into its Treasury Single Account (TSA), as directed by the Federal Government last year.
The banks affected include United Bank for Africa (UBA), $530m; First Bank of Nigeria (FBN), $469m; Diamond Bank Plc, ($287m); Sterling Bank Plc, ($269m); Skye Bank Plc, ($221m); Fidelity Bank, ($209m); Keystone Bank, ($139); First City Monument Bank, (FCMB) $125m; and Heritage Bank, ($85m).
Already, the United Bank for Africa Plc (UBA) has been re-admitted by the CBN. Heritage and Keystone Banks are not listed on the floor of the Exchange. Diamond Bank, in a message to stakeholders, rationalised the punishment for refusal to remit government’s fund as industry-wide, while it is currently engaging the regulator to resolve it.
“For the majority of banking customers there will be no impact at all. There will be some impact on establishing new trade lines through the foreign exchange market and your relationship manager will be able to help you with best-advice if you need to do this,” the bank said.
A source from Fidelity Bank said the status of the funds in its possession was well reported to CBN, including the agreed timeline for its remittance to TSA.
The source also affirmed that the repayment plans has always been complied with, even before the kick off of the TSA and remained ongoing before CBN placed the ban on the bank.
It noted that if there is any change in remittance plans, it was because NNPC had invited banks earlier this year, where they were asked to submit a revised repayment plan for the balance of the funds.
First Bank also said that the now controversial dollar accounts belonging to the Nigeria National Petroleum Corporation (NNPC) were fully disclosed to the CBN and are being operated in line with the regulatory requirements.
It said that a tripartite documented discussions have been ongoing between the CBN, NNPC and the bank on the need for domestic retention of those balances as part of measures to ameliorate challenges posed by the lack of foreign exchange, and customers inability to source it for their trade finance obligations to the bank.
“The bank wishes to reassure all our stakeholders that the issue is not a function of concealment or willful non-compliance by the Bank.
“We are confident in our ability to meet and honour all our obligations as and when due and are currently in talks with the CBN and other relevant bodies and are positive of an amicable resolution soonest,” a statement from the bank said.