UPDATED: Ten bank CEOs make N12.1bn from stock rally in 2017
Ten bank CEOs have made a fortune on the back of the rally in Nigerian bank stocks from January 2017 to date, BusinessDay study of market trends has shown.
The cumulative value of the stock holding of the ten bank CEOs has risen by N12.18 billion in capital gains since the beginning of the year.
The Nigerian Stock Exchange banking 10 index (NGSE B 10) has risen 67 percent year to date, outperforming the All Share Index (ASI) which has returned some 38 percent.
Capital gain is an increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price or price at an earlier period. The gain is not realized until the asset is sold.
One banking source tells BusinessDay that it is a positive development since it means that Bank CEOs net worth are aligned to the share performance of the banks they manage.
The ten bank CEOs are from tier-one banks including; Guaranty Trust, Zenith, Access, United Bank for Africa and First Bank of Nigeria Holdings; Union, Diamond, Sterling, Fidelity and First City Monument Bank (FCMB).
Access Bank’s CEO, Herbert Wigwe has seen the biggest rise in the value of his holdings as his 2.7 billion shares in Access Bank has risen by N11.1 billion to N26.6 billion as of Friday, November 11 from N15.5 billion as of December 30, 2016, following a 71 percent increase in Access Bank’s share price to N9.89 per share from N5.77 within the period.
Wigwe, who has some 2.48 billion and 206 million of indirect and direct shareholdings respectively, accounts for 92.5 percent of the total profit made by the CEOs. He also owns the most shares of any CEO of the 10 banks examined.
“Wigwe is the only owner-manager among bank CEOs and that explains why he holds significantly higher shareholdings and as a result is able to make higher returns compared to others,” said Johnson Chukwu, CEO of Lagos-based financial advisory firm, Cowry Assets.
Behind Wigwe is GTB’s CEO Segun Agbaje, whose 41 million stock holding was up N751.9 million to N1.76 billion as of Friday, November 11 from N1.01 billion as of December 30, 2016, as GTB’s share price spiked 74 percent to N43 from N24.66.
In third and fourth place are Kennedy Uzoka and Nnamdi Okonkwo of UBA and Fidelity Bank respectively.
Uzoka’s 37 million shareholding in UBA is now worth N359 million, up N192 million from N167 million, as UBA’s share price leaped 115 percent to N9.7 from N4.5 per share at the end of 2016.
Okonkwo’s 101 million shareholding has doubled in value, after rising N84.9 million to N169.7 million. Within the period, Fidelity’s share price has jumped 100 percent to N1.68 from N0.84.
Peter Amangbo and Uzoma Dozie of Zenith and Diamond banks are in fifth and sixth place respectively. Amangbo’s five million shares in Zenith Bank have surged to N125 million from N73 million, following a 72 percent jump in Zenith bank’s share price to N25 from N14.5 within the said period.
Diamond bank’s share price had gained 31.9 percent to N1.16 as of Friday, Nov. 11 from N0.88 as at the end of 2016, helping CEO Uzoma Dozie’s 47 million holding to appreciate N13.4 million to N55.7 million from N42.2 million.
FCMB’s Ladi Balogun (the Group CEO) and Sterling bank’s Yemi Adeola are in seventh and eighth place after seeing their holding, 200 million and 25.5 million respectively, rise N8 million and N7.1 million to N228 million and N26.5 million.
FCMB’s share price is up some 3.6 percent to N1.14 per share from N1.1, while Sterling has gained 37 percent in the same period under review.
Rounding out the pack in ninth and tenth place are Union bank’s Emeka Emuwa and First bank’s Adesola Adeduntan.
Emuwa’s 10.5 million holdings of Union Bank shares as of December 2016 are now worth N64.6 million, up N6.8 million from N57.8 million, as Union bank has rallied 11.8 percent to N6.15 from N5.5.
Adeduntan, appointed as First bank’s CEO in January 2016, made the least of the ten CEOs, due to his significantly lower holdings compared to his CEO peers.
The 48 year-old’s 52,189 shares are now worth N378,000 up N203,500 from N174,800, following a 116 percent rally in First bank’s share price to N7.25 as of Friday, November 11 from N3.35 as of December 2016.
Data collated from the 2016 financial statements of the lenders was used in ascertaining the number of direct and indirect shares held by CEOs as of December 2016.
Top-tier banks in Africa’s most-populous nation and biggest oil producer are rallying after the central bank in April opened a foreign-exchange trading window, easing a crippling currency shortage that contributed to the worst economic contraction in 25 years.
Stocks are benefiting from new found optimism about the earnings environment for lenders following a gradual recovery of the Nigerian economy which exited recession in the second quarter of 2017, improved foreign exchange liquidity, higher oil prices and the gradual uptick in oil production.
The collapse in oil prices in mid-2014 sparked a raft of non-performing loans in banks’ books, as local lenders are exposed to oil and gas firms to the tune of some 30 percent. Improving fortunes for oil firms means they are better able to service their loans and free up bank liquidity.
Oil prices closed at a near three-year high of $63.52 Friday, after the arrests of Saudi Arabian royals in an anti-corruption sweep compounded tensions between the world’s largest oil exporter and long-time rival Iran, sending oil prices north.
Oil production rose 10 percent from a month ago to 1.8 million barrels daily in August, according to OPEC data.
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