WARNING: This is Version 1 of my old archive, so Photos will NOT work and many links will NOT work. But you can find articles by searching on the Titles. There is a lot of information in this archive. Use the SEARCH BAR at the top right. Prior to December 2012; I was a pro-Christian type of Conservative. I was unaware of the mass of Jewish lies in history, especially the lies regarding WW2 and Hitler. So in here you will find pro-Jewish and pro-Israel material. I was definitely WRONG about the Boeremag and Janusz Walus. They were for real.
Original Post Date: 2010-12-29 Time: 12:00:03 Posted By: News Poster
By Kingsley Ighomwenghian
Lagos – Experts have expressed confidence that Nigerian banks will soon bounce back in value, out from their bashing in the past 18 months, during which some shed shares by as much as 87.4 per cent between June 4 last year and December 24 this year.
A report by Citigroup Global Markets, an arm of Citigroup International, dated December 10, enthused that the rebound will be on the back of a strong macro-growth outlook; increased capital expenditure by the government, as targeted in Vision 2020; and regulatory support from the Central Bank of Nigeria (CBN).
All these are “aimed at integrating the banking system into the real economy,” the report said.
It predicted that the fragmented market will become concentrated, with 60 per cent of total assets controlled by Zenith Bank, First Bank, and United Bank for Africa (UBA) by 2013, up from 35 per cent last year.
“These three banks are our top picks, not only because we believe that the big will get bigger, but also because the solvency, liquidity and distribution capabilities of these banks are the strongest within our universe of banks.”
The top three are, however, expected to be challenged in future by Access Bank, Guaranty Trust Bank, and Skye Bank.
“While Access Bank’s competitive advantage is its relatively strong capitalisaiton (28 per cent CAR at 3Q10), GTB benefits from its strong institutional brand among Nigeria’s leading corporates, and Skye Bank continues to profit from its strong presence in Nigeria’s commercial centres of the South West and South South.”
The report also noted that although the fall in equity over 2009 impacted on valuation, the levels of equity impairment across the system were not uniform.
While Zenith still has over $2 billion (N300 billion) of equity, for example, the report added, Intercontinental Bank had negative equity at the end of December 2009.
With the banking sector accounting for the bulk of the value of the Nigerian Stock Exchange (NSE) over the years, many believe that it was only natural that the slide in the value of its stocks would drag the entire market down along with it.
“At mid-November 2010 the total market capitalisation of Nigeria’s quoted banks was $18.0 billion (about N2.7 trillion), one-third of its December 2007 level ($53.4 billion).
“Relative to the total capitalisation of the NSE, the bank sector now represents 34 per cent of total (at November 2010).
“Of note, the contribution of the banks sector to the total market capitalisation of the NSE was 62 per cent in December 2007.”
But the report warned that the Asset Management Corporation of Nigeria (AMCON) “is not the final solution” for banks with toxic assets.
Although the AMCON will assist in their recapitalisation, it noted, this will not be “sufficient to make them competitive, even if N1.5 trillion ($10 billion) were injected solely into the affected banks through asset purchases.
“We would estimate that this group of banks would need a further N1.096 trillion ($7 billion) of fresh equity capital to be competitive. By competitive, we mean, for them to return their equity-to-asset ratios to 11 per cent.”
Original date published: 27 December 2010
Source: http://allafrica.com/stories/201012290544.html?viewall=1