Nigerian Bank Nigeria Bank PHB Plc – Intercontinental Oceanic Lead Nigerian Bank Shares Down
Source Bloomberg News: Renee Bonorchis, 14th December 2009
Intercontinental Bank Plc and Oceanic Bank International Plc fell to their lowest levels in at least five years after posting losses.
Intercontinental posted a seven month pretax loss of 447 billion naira ($3 billion), its first loss since at least 2001, it said late on Dec. 11, while the day before Oceanic said it made a nine-month loss of 286 billion naira. The banks made losses after customers struggled to repay debt and they were forced to use their own reserves to meet commitments.
The chief executive officers of eight Nigerian lenders were fired by the central bank, which injected 620 billion naira into those and two other banks to boost their capital and liquidity. By auditing the banks and replacing management, Nigeria’s financial regulator has been “prudent” by bringing forward any losses, Razia Khan, head of Africa research at Standard Chartered Bank, said in a telephone interview from London.
The shares will “inevitably” continue to fall, in part because the scale of the banks’ losses mean they have “whittled away their entire Tier 1 capital,” Khan said. The shares are allowed to fall by a daily limit of 5 percent.
Intercontinental fell 8 kobo, or 4.7 percent, to 1.63 naira, its lowest level since February 2003. Oceanic fell by the same margin to 1.61 naira, the lowest level since July 2004. The CEOS of both companies were removed.
Unity Bank Plc declined 4.7 percent to 81 kobo and FinBank Plc slumped 4.9 percent to 59 kobo. Bank PHB Plc fell 4.6 percent to 1.47 naira and Spring Bank Plc fell 1.9 percent to 1.05 naira.
Of the 10 worst performing stocks on the Nigerian stock index this year four are banks. Wema Bank Plc has fallen 94 percent, the most of any Nigerian stock.
Nigerian Bank Nigeria Bank PHB Plc, Finbank Plc, Intercontinental Bank Plc, Oceanic Bank Plc, Spring Bank Plc, Standard Chartered Bank, Unity Bank Plc, Wema Bank Plc
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