FBN Holdings owns FirstBank, its poster subsidiary
By Jeph Ajobaju, Chief Copy Editor
FBN Holdings (FBNH) rode on high banking stock in 2021 with a Year to Date (YTD) return of 59.44 per cent that beat all other quoted banks on the Nigerian Stock Exchange (NSE).
FBNH is the holding company of FirstBank, a member of FUGAZ, an acronym for Tier-1 banks, the five biggest by market capitalisation – FirstBank, United Bank for Africa (UBA), Guaranty Trust Bank (GTCo), Access Bank, and Zenith Bank.
Apart from FirstBank, only Access Bank clocked double digit returns. Both UBA and GTB Holdco ended in negative territory.
FBNH opened 2021 with its share price at N6.9 per share before rallying all the way to N12.7 per share, its highest price. The stock closed the year at N11.4 per share.
Ecobank (ETI) came second with a share price return of 45 per cent.
FBNH share price appreciation was mostly attributed to the scramble for its shares following disclosure that billionaire investor Femi Otedola had acquired a majority stake in the bank.
The share price was around N7.5 for most of the second and third quarters of the year. However, the rally began in late September when news broke that Otedola was acquiring more stock, according to Nairametrics reporting.
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Performance by FUGAZ
Year 2021 was not that good for the rest of FUGAZ as they struggled to hold on to 2020 gains.
- Access Bank gained 10.06 per cent
- Zenith Bank closed flat at just 1.4 per cent returns
- UBA performed poorly with -6.94 per cent
- GTB Holdco was bottom with -19.63 per cent
The dip in share price also mirrored the drop in pre-tax profits in the first nine months of 2021compared with 2020.
Performance by Tier 2 banks
- Union Bank was the only Tier 2 bank with a double digit return of 10 per cent for the year ended December 2021.
- Wema Bank – 4.35 per cent
- Fidelity Bank – 1.19 per cent
- StanbicIBTC – 0.18.27 per cent
- Sterling Bank – 0.25.98 per cent.
Struggle of Holdcos
Year 2021 was also a year of bank Holdcos. GTB adopted a Holdco structure and Access Bank obtained approval to go Holdco.
Except FBNH, however, all bank holding companies posted negative returns in 2021.
Investors struggled to find value in Holdco structure as the subsidiaries had higher value individually compared with the sum of the parts.
