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Banks Urged to Rise to Fintechs' Challenge


Dike Onwuamaeze
A report on the Nigerian banking sector has stated that the current phase of rising interest rates in the Nigerian financial market will not pose challenge to the sector.
It also warned that the banking sector should not be complacent to the threat posed by financial technology companies (fintechs) on its profitability and growth.
The report, which was released Monday by Coronation Asset Management (CAM) with the title, “Nigerian Banks, Resilience Built-In,” showed that the Nigerian banking system has been resilient over the interest rate cycle, adding that its profitability has improved over time while the stock values of Nigerian banks have remained remarkably cheap compared to their counterparts in Ghana and Kenya. ....

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Nigerian banks' stock cheaper than Ghana, Kenya — Report


Written by Ope Ani and Guy Czartoryski of Coronation Research, It examines what has happened within the Nigerian Banking industry in the last 10 years.
The report noted that in terms of valuations, and despite a significant rally in share prices over the past year, Nigerian bank stocks look remarkably cheap, both in relation to other Sub-Saharan African banks and in relation to their own valuation history. Five years ago the median prospective price-to-earnings (PE) ratio was around 5.0x. Now it is 2.5x. This downward shift in ratings has exposed meaningful value for today’s investors.
According to the report,  four of the banks’ shares changed very little over 10 years, but for Access Bank there is a significant market share gain and for FBN Holdings a remarkable shrinkage in its relative standing. ....

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