First Bank of Nigeria Plc as recorded a significant surge at the Nigerian stock market, with its share price climbing by 31.81 per cent.
The surge followed the bank’s recent announcement of the 100% sale of its stake in FBN Quest Merchant Bank to another company known as EverQuest, on the heels of the bank’s strong first-half results, which included an 100.9 per cent year-on-year growth in pre-tax profit.
Analysts said the divestment reflects the bank’s strategic focus on core operations, cost-saving measures, and strengthening its balance sheet, which investors viewed favorably, leading to a sharp rise in share price the following week. First Bank has been on a long-term upward trend since 2020, with only minor corrections along the way. However, the recapitalization policy introduced earlier this year stirred uncertainty across the banking sector, leading to a 32% decline in FBNH’s share price in April. The downward trend continued through July, with the bank closing at N20.95 by the end of the month.
The release of the bank’s half-year results, which showed an 18.9% year-on-year increase in net interest income and a remarkable 132% rise in pre-tax profit, sparked renewed investor interest in August, pushing the stock into recovery mode. It would be recalled that in the first week of September, the bank announced the sale of FBN Quest Merchant Bank, which the market perceived positively, triggering a price surge the following week. The bank released its financial statement for the first half of 2024, reporting a pre-tax profit that stood at N411.9 billion compared to the N205 billion reported by the group in 2024. Interest income also spiked by 155% climbing to N947.6 billion from N371 billion reported the previous year for period between January 1- June 30. The group’s earnings per share from common stocks also doubled at a value of N10.11 compared to N5.19 of the previous year. Nevertheless, total assets also climbed by 38% and cash and cash equivalents spiked to 86.7%.
First Bank is currently riding a monthly volume of up to 205 million shares already as market volume spiked to 194 million shares. The stock surged by over 30% spurred by a weekly volume of 175 million shares as it corrects from the low of N20.95 it printed earlier. Compared to the other tier one banks, it is the first to appreciate by 30% weekly since the recapitalization news spurred a share price decline in banking stocks.
