Zenith Bank Record N160billion loss in Disappointing Q1
- Zenith Bank had a period it did like to forget in Q1 2021 after market capitalisation collapsed
- The lender recorded over N160 billion loss during the first quarter of this year, representing a dip of 18.7%
- The bank's market value fell by N59.6 billion in February, then recorded another loss of N100.50 billion in March
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Zenith Bank chairman, Jim Ovia, is one of the easily recognisable faces in the financial industry, and nicknamed the 'godfather' due to his years of experience in investment banking, but his expertise wasn't enough to stop the company from losing N160 billion in Q1 2021.
The lender is the second biggest Nigerian bank by market capitalisation in the first quarter 2021, and has been struggling with Guaranty Trust Bank for the first position, but its loss in the first quarter cement it as second fiddle in the financial market.
The loss recorded by the lender was in its market capitalisation which ended the first month of this year at N853.9 billion, only to lose N59.6 billion in the next month to close February with N794.3 billion.
This fall widened the gap between Zenith Bank and GTBank, which remained ahead despite recording it's own loss during the same period under review. The bank led by Emmanuel Onyeagwu recorded more losses in March.
At the end of the first quarter, Ovia's bank lost N100.50 billion in market value, sending its market capitalisation downward to N693.8 billion in March. This represents a decline of 18.7% in the market value of Zenith Bank.
Source: Getty Images
The fall in the lender's market cap is caused by shareholders selling off their shares to protect their profit which had accrued since last year's growth experienced by the Nigerian Stock Exchange after the outbreak of COVID-19 pandemic.
As investors participation drop in the capital market, holders of Zenith's stocks are dumping it as well to invest in more lucrative assets market like the debt decurities or high interest bonds.
Meanwhile, Legit.ng had earlier reported that the Securities and Exchange Commission (SEC) has banned online investment companies dealing in securities.
The capital market regulator clampdown on the digital investment platforms affected the likes of Chaka Technologies, Bamboo, Risevest and other market rivals.
SEC said only registered securities in Nigeria are allowed, and cautioned Nigerians against dealing with online investment platform. The trading authority said they are not a registered entity.
Source: Legit.ng
