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Some rescued banks’
shares at the Nigerian Stock Exchange (NSE) saw considerable
improvement in their value this year, despite the general weak
performance witnessed in the banking sector during the year.

From January 4 to
December 23, the share prices of five out of the seven rescued banks
recorded growth within the range of 23.28 per cent to 46.32 per cent;
while their counterparts only showed about 10 to 20 per cent growth in
value.

Finbank’s share
showed 25.45 per cent increase; BankPHB grew by 30.43 per cent; Spring
Bank by 23.28 per cent; while Oceanic Bank and Intercontinental Bank
recorded increase of 25.44 gains per cent and 46.32 per cent. However,
Union Bank declined in value by 31.52 per cent while Afribank followed
with a marginal decline of 1.64 per cent.

Analysts at
Proshare Nigeria, a business advisory company, said although “rescued
banks witnessed volatility as the market swings up and down” during the
year on the back of mixed sentiments, the rescued banks “gained more
points despite the volatility witnessed.”

Investors’ confidence

Bola Oke, a
chartered accountant at WealthZone Company, an investment management
firm, said the performance of the “troubled banks” showed that
investors are beginning to have confidence again in the rescued banks
“following the various reforms by the Central Bank.”

“The improvements
seen in those stocks this year obviously testified to us that the fear
is over. We can only expect that investors’ confidence will grow better
and faster next year when the Asset Management Corporation of Nigeria
(AMCON) kick off as planned,” Mrs Oke said.

Boniface Okezie,
the national chairman of the Progressive Shareholders Association of
Nigeria, also agreed that “until the AMCON clears all the toxic assets
it was created to solve” in the banking sector, investors’ confidence
in the sector may not improve significantly next year.

The genesis

Over a year ago,
the Central Bank sacked the former chief executive officers and top
managements of the seven banks for various atrocities. The banks’ heads
were immediately replaced with new ones. The development, however, led
to the free fall of those banks’ shares at the stock market.

However, some quoted equities at the NSE remained resilient during
the year in spite of the downturn in the capital market that sent
stocks’ prices below their official listed values. Many of these stocks
fall in few sectors out of the 30 sectors listed at the Exchange. They
range from the banking, breweries, building material, conglomerates,
food/beverages, and healthcare sectors.