June 05, (THEWILL) – The impressive performance by FirstBank in its Q1 2022 operations has elicited commendations from experts who predict high returns as investors scramble for its stocks.
The oldest first-generation bank reported a 108 percent spike in its net profit spurred by significant loan recoveries and on strong capital adequacy ratios.
Analysts at Financial Derivative Company (FDC), a foremost advisory firm, said that FirstBank’s Q1 2022 results showed that its turnaround strategy had paid off and, therefore, holds good prospects for investors.
In a note released over the weekend, FDC said,
”FirstBank delighted investors with a pleasant surprise when it announced stellar results confirming that its turnaround strategy pinned on the pillars of innovation, resilience and digging deep is working.
“Its profit after tax spiked 108% to N32.4billion on the back of massive loan recoveries and a sharply lower level of non-performing loans (6.1%).
“Its capital adequacy ratio (CAR) increased to 17.4%, giving it the much-needed buffers required to withstand financial shocks and turbulent headwinds in the coming quarters” the advisory firm stated in a note titled ‘Reaping the Benefits of a Solid Legacy’.
It added, “FirstBank, one of a handful of banks that adopted the holding company structure, has been proven right as almost all the other tier one competitors have emulated the model.
“As far as competition is concerned, FirstBank is fighting hard to recover lost grounds to the nimble fintechs, the highly capitalised and efficient telcos and their payment savings bank subsidiaries.
“Indeed, FirstBank is well equipped to fight amongst the sharks in this blood-soaked ocean.
“We expect to see FBN stock rise in the months ahead due to its massive undervaluation and its evident potential upside. We recommend the stock as a BUY”.
Last week, market information indicated that about 274 million units worth of FBN Holding shares were sold via crossing on the Nigerian Exchange as of closing on Thursday, June 2nd, 2022.
The shares were crossed via Cardinal Stone in a trade that was tracked by most stockbrokers who confirmed the development to financial market reporters.
The shares were worth over N4 billion and assumed a share price of about N14 per unit.
However, FBN Holdings closed trading on that day with a share price of N11.10, despite the crossing of a total of 74,658, 224.00 shares valued at N836,141,401.50.
Share prices at crossing are often at a premium to the regular trading price.
The assumed share price of N14 per unit was a significant premium to FBN Holdings’ existing share price of N11.10.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
