Banks Recapitalization Watch for the week ended July 19, 2024

This week, the NGX-Banking Index declined by 0.05% week on week (W-o-W) to close at 843.99. Among the Tier 1 banks, GTCO and Ecobank have shown positive performance so far this year. Specifically, GTCO’s shares have surged by 10.99% year-to-date (YTD), closing at N44.95, while Ecobank saw a rise of 3.35% YTD to N20.90, marking a significant divergence from the negative performance observed in the same category FCMB by other banks. 

Wema and FCMB, both Tier 2 banks, displayed positive gains in YTD performance. However, the remaining three banks saw their share prices decline over the same period (see Table 1 below).

Table 1

Throughout the week, three Tier 1 banks, Access Bank, Ecobank, and UBA witnessed an upward movement in their share prices, reflecting positive market performance. Concurrently, GTCO, FBNH, and Zenith recorded a declined in their share prices

Stanbic IBTC and Wema, both Tier 2 banks, saw their share prices decline, contrasting with the performance of other banks. The remaining banks saw share price rise for the week. Notably, FCMB stood out with a significant 5.30% increase in its share price

GTCO unveiled its capital raise plan this week. On July 15, 2024, GTCO announced a N392.490bn capital raise via public offer through the issuance of N9bn new shares at N44.50K. The amount announced will close the bank’s funding gap (see Table 2 below).