₦airaland Forum

Earnings quality. I don't know about the 30-50% haircut, but true true a lot of bank earnings are paper earnings subject to revisions, impairments, etc. So it's not a surprise they trade at a discount to the general market.

nosa2:
Why?

Harddiskng:
You heard what was said about “Leverage”.

One thing i can never do is borrow. Whenever the discussion comes up and people ask me - i tell them the dumbest thing - “God told me never to borrow”. They likely laugh but it is truth? Yes.

Apart from this, with borrowing I feel I am negating rule 1 - always live below your means.

Borrowing only implies living above your means if you're borrowing for consumption.

For instance, I spend less than 20% of my income (on rent and other personal expenses).

I have minimal transport cost cos I work from home.

Yet I borrowed so much in 2025.

In my case, the borrowing I did has now helped me come to a place where I don't need to borrow anymore.

This past week I still got 2 different offers from banks, but I was able to say "no thanks" . Whereas about this time last year, I was ready to even borrow at 300% annualized. I was strapped!


I don't think we should wrap every kind of borrowing in one blanket of good or bad. The purpose -and more importantly the results - determine if it's good or not.

If you're convinced, God hasn't approved it for you specifically, please stick with that conviction. He has His different dealings with each of us, no need for unnecessary emulations.

pluto09:
For a better perspective, you need to look at history of Nigeria banks p.e and some other ratios.
This is not the first time that banks earning multiples would be very low.
The big question is, will it continue to be low or something is about to change?

We don tell Oga Nosa repeatedly o. Most of the bank earnings are fickle and not as "real" as sectors like consumers. I can't remember seeing PE of any bank beyond 5 in the last 15 years. Na GTB dey reach 5 sef because of the premium attached to it.

It is only Alhaji that I believe fits your point. But since he is the richest person we could say that's the way the rich should behave.

HesInMe:
Lol. The rich don't care about the stupid ethnicity and religion they use to divide and conquer the poor. Only cold hold $$$ matters.

Who else noticed Otedola GEREGU exited at just around half the current share price.


If the $750m figure is true, it comes to just about N600 per share compared to the market price of N1141.

https://punchng.com/shareholders-approve-geo-fluids-n25bn-capital-raise/

Is this the original Geo-Fluids or ........

nosa2:
Are you licensed and operating or its just the app

It's an application with the necessary licensed providers in place already.

I also think it's worth mentioning that we're currently ranked 1st out of 24 in the current games.

Worst possible position at this stage is 2nd out of 24.

4 more wins are all that are required.

Agbalowomeri:
We don tell Oga Nosa repeatedly o. Most of the bank earnings are fickle and not as "real" as sectors like consumers. I can't remember seeing PE of any bank beyond 5 in the last 15 years. Na GTB dey reach 5 sef because of the premium attached to it.

With zenith bank a sure bet for 15% dividend yield in some of those years.

Agbalowomeri:
We don tell Oga Nosa repeatedly o. Most of the bank earnings are fickle and not as "real" as sectors like consumers. I can't remember seeing PE of any bank beyond 5 in the last 15 years. Na GTB dey reach 5 sef because of the premium attached to it.

If I am wrong I lose some money. If I am right you guys will turn to incremental buyers. Time will tell

Yes.

pluto09:
https://punchng.com/shareholders-approve-geo-fluids-n25bn-capital-raise/

Is this the original Geo-Fluids or ........

awesomeJ:
Borrowing only implies living above your means if you're borrowing for consumption.

That is for you. For me borrowing for anything at all implies “I’m living above my means”

Do what works for you.

nosa2:
Why?

Based on the type of the business they do , some of those earnings are not backed by cash


What I do is to add a premium of 60% to 80% to the dividend paid and take that as my EPS for the basis of my valuation.

If a bank paid a total dividend of N5, I will assume the EPS to be between N8 and N9

Harddiskng:
That is for you. For me borrowing for anything at all implies “I’m living above my means”

Do what works for me.

That as well is for you.

People who know more than you understand that borrowing isn't always about overspending.


You think Dangote was worried about personal expenses when he took a syndicated loan in 2013 to start a refinery.


You need to reach a place where no matter how lavishly you spend, it's insignificant compared to how much you're borrowing.


Consumer loans are one level of growth, there's a higher level where no matter how reckless you become, your personal expenses can't even reach 1% of what you're borrowing. When you get to that stage, you will unlearn all this talk of living above your means.

HesInMe:
Earnings quality. I don't know about the 30-50% haircut, but true true a lot of bank earnings are paper earnings subject to revisions, impairments, etc. So it's not a surprise they trade at a discount to the general market.

God bless you.

Paper profits that are not backed by cash

GtBank doing N10bn PP at N80.

emmanuelewumi:
Based on the type of the business they do , some of those earnings are not backed by cash


What I do is to add a premium of 60% to 80% to the dividend paid and take that as my EPS for the basis of my valuation.

If a bank paid a total dividend of N5, I will assume the EPS to be between N8 and N9

Fair enough. I don't agree but I understand why you think so

awesomeJ:
GtBank doing N10bn PP at N80.

Link pls, abi are you an insider?

awesomeJ:
Who else noticed Otedola GEREGU exited at just around half the current share price.


If the $750m figure is true, it comes to just about N600 per share compared to the market price of N1141.

Good observation.

nosa2:
Fair enough. I don't agree but I understand why you think so

No problem, it is the nature of the business.

Banks pay dividends based on CBN approval, banks CEO will always want to pay a high dividend in order to boost their stock prices, they can get money out of thin air to pay the big dividends.


It was a retired bank inspector at CBN that advised me not to ever make my projections and valuation based on the report earnings of the banks to avoid disappointment

nosa2:
Link pls, abi are you an insider?

https://doclib.ngxgroup.com/Listings-site/corporate-disclosure-site/Documents/GTCO_Announcement_of_Private_Placement_.pdf

It is on NGX ......

nosa2:
Link pls, abi are you an insider?

It's on the corporate disclosure page of ngx

[quote author=nosa2 post=137961897]Link pls, abi are you an insider? [/qu wa

awesomeJ:
That as well is for you.

People who know more than you understand that borrowing isn't always about overspending.

Watch the YouTube video. It’s all starts with people thinking they are smarter and they know more.


https://www.youtube.com/watch?v=02POqrHMhyg?si=iiFXAdBORy6kRyEy

I will stick with the basics.

Do what works for you

Harddiskng:
Watch the YouTube video. It’s all starts with people thinking they are smarter and they know more.


https://www.youtube.com/watch?v=02POqrHMhyg?si=iiFXAdBORy6kRyEy

I will stick with the basics.

Do what works for you

Says Munger and Buffet, who own insurance companies so that they can bet on the premium paid to their companies and they don't pay dividends.

Will they invest in any business that is not leveraged in order to grow and multiply earnings over the years

That is why invested capital is a combination of equity and debt

The main problem in over leverage and not leverage itself

Harddiskng:
Watch the YouTube video. It’s all starts with people thinking they are smarter and they know more.


https://www.youtube.com/watch?v=02POqrHMhyg?si=iiFXAdBORy6kRyEy

I will stick with the basics.

Do what works for you

Time is precious.

I don't watch unnecessary videos.

You on the other hand should learn about leverage.

The evidence that it's you who needs it is the fact that you still think leverage is about paying rent or fueling your car.

We have seen people like Alhaji change the economic lot of an entire country simply by being bold and knowledgeable to use leverage.

Alhaji borrowed not to buy yatch, everyone including you is benefiting from that decision today, that singular decision is the reason you're buying fuel today below #800.

Better leave useless videos and expand the scope of your knowledge.

awesomeJ:
Time is precious.

I don't watch unnecessary videos.

You on the other hand should learn about leverage.

It is not by force nau lmao

Do what works for you, i will do what works for me.

Harddiskng:
It is not by force nau lmao

Do what works for you, i will do what works for me.

Didn't you read my post well?

When did I ask you to pivot?

All we do here is clarify misconceptions. When you make your billions will I spend from it??.

awesomeJ:
Didn't you read my post well?

When did I ask you to pivot?

All we do here is clarify misconceptions. When you make your billions will I spend from it??.

I have read your post very well now.

Do what works for you!

Harddiskng:
I have read your post very well now.

Do what works for you!

Obviously. Why do feel the need to repeat the obvious??

awesomeJ:
Obviously. Why do feel the need to repeat the obvious??

Same way you feel the need to keep quoting me lol