Banks' market cap down N1.74trn since CBN announced recapitalisation plan

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Commercial banks' market capitalisation has depreciated by N1.74 trillion since CBN directed financial institutions to conduct a recapitalisa

Commercial banks’ market capitalisation has depreciated by N1.74 trillion since the Central Bank of Nigeria directed financial institutions to conduct a recapitalisation exercise.an upward review of the minimum capital requirements for commercial, merchant and non-interest banks.

Before CBN’s announcement, the banks’ all-share index had appreciated from 894.20 ASI to 1,029.63 ASI between January 1 to March 28 — representing an increase of 15.14 percent. Charles Abuede, research lead, Cowry Asset Management Limited, said the decline reflects the impact of the directive by CBN.Abuede said investors have not lost their faith in the banks, however, most investors are trying to avoid the situation of share dilution.

GTCO’s bourse valuation fell from N1.54 trillion to N1.08 trillion after the company’s share price dipped to N36.8, from N52.50.First Bank of Nigeria Holdings recorded N369.72 billion decline in its market valuation following a 28.97 percent dip in the company’s share price.This led to FBN Holdings dropping out of the NGX trillionaire stock list as the market capitalisation decreased from N1,27 trillion to N906.35 billion.During the review period, Zenith Bank’s share price depreciated by 20.

Fidelity Bank’s market capitalisation dropped following a 19 percent dip in the company’s share price, which depreciated from N10 to N8.1.Data from the stock market showed Stanbic IBTC lost N45.34 billion during the period in review.This followed a 6.25 percent decline in the company’s share price after it dropped from N56 to N52.5.Sterling Financial Holdings Company recorded a loss of N34.54 billion in its market capitalisation as the lender’s share price depreciated by 22.22 percent.

 

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