Market capitalisation 10 DMBs increase to N7.87trn in 2024

The market capitalisation of 10 Deposit Money Banks (DMBs) rose to N7.87 trillion in 2024 despite investors trading the financial institution stocks with caution. 

The overall market capitalisation of the Nigerian Exchange Limited (NGX) increased to N62.76trillion on the stock market

The NGX banking Index that witnessed mixed reactions in 2024, however, closed positive amid impressive corporate earnings by listed banks on the Exchange.

According to analysts, investors have been trading cautiously in the banking stocks on the backdrop of recapitalisation policy of the Central Bank of Nigeria (CBN).

The CBN announced the banking sector recapitalisation exercise, March 28, 2024, and investors who invested in the banking stocks have maintained caution trading.

In the new dispensation, commercial banks are facing minimum capital thresholds of N500 billion for international authorisation and N200 billion for national authorisation. In contrast, those with regional authorisation are expected to achieve a N50 billion capital floor.

Similarly, non-interest banks with national and regional authorisations will need to increase their capital to N20 billion and N10 billion, respectively.

To enable the banks to meet the minimum capital requirements, the CBN urged banks to consider injecting fresh equity capital through private placements, rights issues, and/or offers for subscription; Mergers and Acquisitions (M&As); and/or upgrades or downgrade of license authorisation.

The investigated 10 banks by WESTERN POST saw a significant increase in their stock prices in the 2024 financial year and it contributed to their market value on NGX.

In the period under review, the market capitalisation of GTCO added N485.62 billion to close at N1.68trillion as of December 31, 2024 when its stock price gained N16.50 per share or 40.7 per cent to close 2024 at N57.00 per share from N40.50 per share it opened for trading.

GTCO that declared N1.22 trillion profit before tax in nine months of 2024 gained the highest market value in the year under review, followed by Zenith Bank Plc.

Zenith Bank’s market capitalisation   closed 2024 at N1.43 trillion  when its stock price closed 2024 at N45.5 per share, about N6.85per share or 17.7 per cent increase from N38.65 per share when the stock closed 2023. United Bank for Africa (UBA) Plc and FBN Holdings Plc joined the top four financial institutions with the market value in excess of N1 trillion.

As UBA’ stock price appreciated by N8.35 per share or 32.6 per cent to close 2024 at N34 per share, its market capitalisation increased to N1.16 trillion as of December 31, 2024.

For FBN Holdings, its market capitalisation closed 2024 at N1.01trillion when its stock price increased to N28.05 per share, N4.50 per share or 19.11 per cent increase over N23.55 per share it opened for trading last year.

Others: Access Holdings Plc, N847.75billion; Wema Bank Plc, N195.01billion; Jaiz Bank, N133.77 billion; FCMB Group Plc, N186.15billion; Sterling Holding, N161.23billion; Ecobank, N513.8 billion; and Fidelity Bank, N560.21billion market capitalisation as of December 31, 2024.

Among the investigated banks, Access Holdings and FCMB Group are the only two financial institutions that have successfully completed capital raising exercises on the Exchange. 

GTCO had announced the successful completion of the first tranche of its equity capital raise programme, following the completion of the capital verification exercise conducted by the CBN and the approval of the Basis of Allotment of the Offer by the Securities and Exchange Commission (SEC).

The Offer, which garnered substantial interest from domestic retail investors, raised a total of N209.41 billion from 130,617 valid applications for 4,705,800,290 Ordinary Shares, fully allotted.

This milestone concludes the first phase of GTCO’s phased equity capital raise programme, which is structured on a balanced allocation strategy based on an equal split between institutional and retail investors. This balanced approach aligns with GTCO Plc’s commitment to fostering a well-diversified and robust investor base.

Commenting on this phase of the recapitalization exercise, Group Chief Executive Officer of GTCO , Segun Agbaje in a statement said, “We extend our sincere appreciation to our new and existing shareholders, as well as the regulatory authorities, for their unwavering support during this initial phase of our equity capital raise.

“The strong participation and successful capital verification exercise and allotment process reaffirm the confidence investors have in our fundamentals and execution capabilities. This sets a solid foundation for accelerating our strategic roadmap, which aims to pivot the Group for transformational growth and unlock greater value across the Group’s Banking and Non-Banking businesses.”

Investors await outcome of Sterling Holdings, FBN Holdings, Fidelity Bank, Zenith Bank and   UBA capital raising exercise.