Stock Market: Investors Lose N8bn In Banks Suspended By CBN Over TSA Infractions

Stock market sentiment Wednesday came against all the banks indicted by the Central Bank of Nigeria, CBN, over Treasury Single Account, TSA, infractions forcing a total loss of N8.1 billion on their investors, as the share prices shed weight. The affected banks are United Bank for Africa Plc (UBA), First Bank of Nigeria, Diamond Bank Plc, Sterling Bank Plc, Skye Bank Plc, Fidelity Bank Plc and First City Monument Bank (FCMB).
FCMB
The other banks involved in the sanction, Heritage Bank and Keystone Bank, are not on the Nigerian Stock Exchange. CBN had barred the affected banks from dealing in foreign exchange transactions until they regularize their positions with the apex bank in respect of TSA obligations on the account of Nigerian National Petroleum Corporation, NNPC, forex receipts. Consequently, investors reacted to this development by offloading the shares causing some degree of mark-down in the stock prices.
UBA The loss momentum was led by stocks of Diamond Bank and UBA which lost about N2.5 billion each, but while Diamond’s share value dropped by a huge 8.9 per cent that of UBA dropped by 1.5 per cent. They were followed by FCMB which dropped by 5.0 per cent translating into a financial loss of N1.19 billion to the shareholders. Shareholders lost N863 million, N350 million, N326 million and N289 million in Sterling Bank, Skye Bank, First Bank and Fidelity Bank respectively. Stock market dealers believed the adverse sentiments were buoyed by perceived dependency of the banks on foreign exchange transactions for a huge portion of their earnings, and reasoned that the CBN action would translate into erosion of the banks’ profits and returns to the investors in their stocks. Meanwhile more of the affected banks have reacted to the alleged withholding of foreign exchange inflows from NNPC, for which they were sanctioned.
Meanwhile,the CBN has readitted UBA into the foreign exchange market. According to a statement received late Thursday night by The Street Journal from UBA Head- office in Lagos, ”this is to confirm that the United Bank for Africa (UBA) Plc has remitted all outstanding NNPC/NLNG deposits in its possession to NNPC’s Treasury Single Account (TSA) at the CBN”.
Accordingly, the United Bank for Africa (UBA) Plc has been re-admitted into the Foreign Exchange Market effective Thursday, August 25, 2016

Author: News Editor

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