NSE Demutualization

GTB Others Crash NSE Banking Index By 3.12%

Zenith Bank, GTB, Access Bank Others Crash NSE Banking Index By 3.12%

The banking Index fell 3.12 percent Wednesday, ranking the biggest losing sector on the Nigerian Stock Exchange (NSE).

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The index which measures performance of the banking sector closed at 339.43 index point down from 350.36 index point of the previous day.

All of Guaranty Trust Bank (GTB), Zenith Bank, Access Bank, Fidelity Bank and Sterling Bank Plc.contributed to the poor performance of the banking index

A cursory look into the trading activities of these banks on Wednesday reveals that Sterling Bank Plc was the biggest decliner in terms of percentage, when the lender dropped 9.47 percent in the value of its share price. The share value declined from N1. 69 Kobo per share to close a N1. 53 Kobo per share.

Zenith Bank Plc followed in second place losing 4.11 percent, as its share price fell to N21 per share from N21.90 Kobo per share it posted the previous trading session.

Fidelity Bank Plc was also in the negative territory on the Bourse, dropping 3.47 percent, from N2.59  Kobo per share to N2.50 Kobo per share.

Guaranty Trust Bank was also among the losers on the NSE, as its share price shed 3.28 percent to stand at N28 per share down from N28. 95 Kobo per share, while

Access Bank Plc completed the top five losers, to dip by 2.47 percent. The value of its share stands at N7. 9 Kobo per share from N8. 10 Kobo per share.

Overall, the Nigerian Stock Exchange recorded a marginal growth on Wednesday as the All-Share Index and Market Capitalization rose by 0.02 percent.

The ASI appreciated by 7.42 index point to close at 38,774.03 basis point up from 38,766. 61 basis point, while the market capitalisation jumped by N3.878 billion to close at N20.286 trillion up from the N20.282  trillion it commenced trading with on Wednesday.

A total turnover of 356.461 million shares valued at N4.193 billion in 6,130 deals exchanged hands, while the market breadth was positive, with 27 advanced stocks and 12 laggards.

On the market activity chart, Zenith Bank returned as both the most active and valuable equity on the exchange, trading at 55.030 million worth of shares valued at N1.156 billion.


Savings interest

Here are banks that pay higher interest for your savings

Some Nigerian banks are paying higher interest to customers for saving their money with them, while others pay lower than regulatory approved minimum rate of 1.15 percent.

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The Central Bank of Nigeria (CBN) on August 31, 2020, slashed the minimum interest payable on savings deposited in banks across the country to 10 percent per annum of the Monetary Policy Rate (MPR).

The MPR is currently at 11.5 percent. What this means is that the banks are to pay average interest rate of 1.15 percent (10 percent of 11.5 percent) to their customers for saving with them.

The CBN on September 22, 2020, cut its benchmark interest rate by 100 basis points (bps) from 12.5 percent to 11.5 percent.

Some of tier two and three banks are paying higher interest rate on savings account, a development analysts describe as a way of attracting customer deposits.

Out of 21 deposit money banks that published their rates as at March 5, 2021, Heritage Bank pays higher interest rate on savings at an average of 4.2 percent.

It is followed by Suntrust Bank 4.1 percent, Unity Bank 1.9 percent, Ecobank 1.25 percent, Citibank and Standard Chartered Bank 1.2 percent each.

The bank with the lowest interest payment on savings account is Providus Bank Limited. It pays average rate of N0.62 percent followed by Unity Bank plc, which pays N1.07 percent to their customers.

Other banks that pay N1.15 percent interest rate on savings include FCMB, Fidelity Bank, GTBank, Globus Bank, Keystone Bank, Polaris Bank, Stanbic IBTC, Sterling Bank, Titan Trust Bank, UBA, Wema Bank, and Zenith Bank.

Customers’ reaction

Christian Ezegolo, a Nigerian businessman, does not operate a savings account because he needs money to invest in his business and could not accept what he described as peanut that banks pay as interest on deposit.

“To me as an entrepreneur, I don’t save because I need that money to run my business. It does not make economic sense to me that I will go and give bank money and it is paying me 1.1 percent and I will still go to another bank and borrow at 25 percent, it does not make sense,” he says on phone.

What analysts say

Ayodeji Ebo, head, retail investment, Chapel Hill Denham, says banks are not supposed to pay lower than the regulatory prescribed interest rate, noting customers have the option of going to a bank that can compensate them better on their savings.