₦airaland Forum

Guinness +10%

Careful. Banks aren't typically valued using price-to-earnings (P/E) ratios and almost always trade at a deep discount to market P/E. So a low P/E doesn't necessarily mean they are cheap.

Price-to-book (P/B) is a better metric. Banks are asset-heavy, and most of those assets are financial, so their P/Es are particularly sensitive to accounting adjustments like loan-loss ratios and revaluations. Think Oando's accounting on steroids.

If you want to bet on banks now, I'd look at the ones that are still growing their more predictable fee income.

pluto09:
Looking at the valuation of banks pre and post dilution,the banking sector still represents arguably the cheapest on NSE.

crownprince2017:
Somebody bought 3m units of wapco @ 70, any insider information, m sure the person knows something majority don't know.

not sure waoco can do more than 90 before seller come in...looking at correcting to 52 to 65 region.....

HesInMe:
Careful. Banks aren't typically valued using price-to-earnings (P/E) ratios and almost always trade at a deep discount to market P/E. So a low P/E doesn't necessarily mean they are cheap.

Price-to-book (P/B) is a better metric. Banks are asset-heavy, and most of those assets are financial, so their P/Es are particularly sensitive to accounting adjustments like loan-loss ratios and revaluations. Think Oando's accounting on steroids.

If you want to bet on banks now, I'd look at the ones that are still growing their more predictable fee income.

Even if you use P/B, the tier banks are still cheap.
Zenith P/B is less than 0.5, Access is around 0.3..post dilution access will still not be up to 0.4.
Note: my contributions to the discussion on valuation of Nigeria banks doesn't mean I will buy bank shares at current market price.

HesInMe:
Careful. Banks aren't typically valued using price-to-earnings (P/E) ratios and almost always trade at a deep discount to market P/E. So a low P/E doesn't necessarily mean they are cheap.

Price-to-book (P/B) is a better metric. Banks are asset-heavy, and most of those assets are financial, so their P/Es are particularly sensitive to accounting adjustments like loan-loss ratios and revaluations. Think Oando's accounting on steroids.

If you want to bet on banks now, I'd look at the ones that are still growing their more predictable fee income.

What was your former moniker? You seems sound in this particular one!

HesInMe:
I agree. But you're actually making the case for not investing in banks. You and I can go and buy the very same high-interest FGN and corporate bonds the banks are accumulating. Why pay executive salaries and office space for the privilege?

Investing is not a team sport. For every buyer there is a seller. Only one is them will be right

HesInMe:
Careful. Banks aren't typically valued using price-to-earnings (P/E) ratios and almost always trade at a deep discount to market P/E. So a low P/E doesn't necessarily mean they are cheap.

Price-to-book (P/B) is a better metric. Banks are asset-heavy, and most of those assets are financial, so their P/Es are particularly sensitive to accounting adjustments like loan-loss ratios and revaluations. Think Oando's accounting on steroids.

If you want to bet on banks now, I'd look at the ones that are still growing their more predictable fee income.

And the price to book for Nigerian banks is still very low

pluto09:
Even if you use P/B, the tier banks are still cheap.
Zenith P/B is less than 0.5, Access is around 0.3..post dilution access will still not be up to 0.4.
Note: my contributions to the discussion on valuation of Nigeria banks doesn't mean I will buy bank shares at current market price.

You won't see these banks for less than what you are seeing now. Either you buy now, not higher or don't buy at all

nosa2:
You won't see these banks for less than what you are seeing now. Either you buy now, not higher or don't buy at all

I think one should have taken position before now.
If I am to buy any of the banks now, my decision would mostly be influenced by TA more than FA.

ARADEL. ±
CONOIL. ±
ETERNA. ±
OandO. ±

mikeapollo:
Thanks; kudos for this wonderful site

Thank you for your support!

pluto09:
I think one should have taken position before now.
If I am to buy any of the banks now, my decision would mostly be influenced by TA more than FA.

I got in earlier but if I get money and valuations remain where they are, I'm buying more.

Remember that price and valuation are not the same thing. I am looking at valuation not price

KarlTom:
ARADEL. ±
CONOIL. ±
ETERNA. ±
OandO. ±

person wey die and person wey lost don meet again

nosa2:
I got in earlier but if I get money and valuations remain where they are, I'm buying more.

Remember that price and valuation are not the same thing. I am looking at valuation not price

👍

Je suis de Retour.

Nairaland mods, you people should be calming down ooo.

KarlTom:
ARADEL. ±
CONOIL. ±
ETERNA. ±
OandO. ±

What is strange to me is that there is no mention of the usual ''high'' or ''low'' prices (in the NGX daily market report) for some stocks for some days now, yet millions of units were traded.

RSI-NGSEBNK10 divergence: on the weekly and Monthly

Double top
Distribution
Enjoy

Agbalowomeri:
RSI-NGSEBNK10 divergence: on the weekly and Monthly

Double top
Distribution
Enjoy

Welcome back.
Banking#

INTENEGINS setting a marker for the :INS

https://doclib.ngxgroup.com/Financial_NewsDocs/42947_INTERNATIONAL_ENERGY_INSURANCE_PLC-_YEAR_END_-_FINANCIAL_STATEMENT_FOR_2024_FINANCIAL_STATEMENTS_JANUARY_2025.pdf

Market is indeterminate for now.
Everyone is waiting for FY reports...

mikeapollo:
What is strange to me is that there is no mention of the usual ''high'' or ''low'' prices (in the NGX daily market report) for some stocks for some days now, yet millions of units were traded.

Agbalowomeri:
RSI-NGSEBNK10 divergence: on the weekly and Monthly

Double top
Distribution
Enjoy

Break it down please.

sky2891:
Break it down please.

Means bank bears is around the corner in the coming months

RSI is not forming new high the same way price is forming new high

Am I a contrarian?

A correction is due in this market, maybe within coming weeks.....bout a 20% ell off across many assets....

Really

PuristForest:
A correction is due in this market, maybe within coming weeks.....bout a 20% ell off across many assets....

Momentum is still to the upside given the regulatory environment.
Will bank bears seize control as they did in the first half of 2024 or bid their time for the second half this time?

Agbalowomeri:
Means bank bears is around the corner in the coming months

RSI is not forming new high the same way price is forming new high

Am I a contrarian?

What would be the catalyst? 20% of the ASI?

Covid trade was a 30% drop from high to low.

PuristForest:
A correction is due in this market, maybe within coming weeks.....bout a 20% ell off across many assets....

thesilentone:
Momentum is still to the upside given the regulatory environment.
Will bank bears seize control as they did in the first half of 2024 or bid their time for the second half this time?

We may be back to dividend-dumping this year

We are also likely to see an EPS decline across board as the quarterly results trickle in. I don go queue for November again 😂

Are these forward, fully diluted (including the new shares) numbers? And what was the historical, pre-recapitalization P/B?

One idea for valuation is a sum of the parts: Separate banks' fee income from their net interest income; apply a market-premium P/E to their fee income and a historically average P/B to their other income; add them together on a forward, fully diluted basis. Only for the motivated folks

pluto09:
Even if you use P/B, the tier banks are still cheap.
Zenith P/B is less than 0.5, Access is around 0.3..post dilution access will still not be up to 0.4.
Note: my contributions to the discussion on valuation of Nigeria banks doesn't mean I will buy bank shares at current market price.

I see you at the 1000 point with that hammer.

It might pullback to the EMA.

Agbalowomeri:
We may be back to dividend-dumping this year

We are also likely to see an EPS decline across board as the quarterly results trickle in. I don go queue for November again 😂

thesilentone:
What would be the catalyst? 20% of the ASI?

Covid trade was a 30% drop from high to low.

Could be falling oil prices due to slowdown in Chinese economy leading to lower global demand and excess supply caused by the drill baby drill pledge by president Trump

Valid.

These scenarios may well happen to the global market, given the unpredictable nature of Trump but the initial poster referred to the NGX specifically. The peculiarities of NGX ought to be factored in when suggesting a rug pull of 20% for the ASI.

I trade what I see not what I want to see.

Contrarians are right when they are, the challenge is the timing. Trend following is a safer bet.

Bovis:
Could be falling oil prices due to slowdown in Chinese economy leading to lower global demand and excess supply caused by the drill baby drill pledge by president Trump