The shares of Sterling Bank Plc reflected the essence of buying low priced stocks as the equity led others in the banking sub-sector in terms of recovery in the first quarter of 2010.
As a result of the stock market crisis and the banking reform embarked upon by the Central Bank of Nigeria, bank stocks suffered an unprecedented plunge in 2009 and the shares of Sterling Bank were among those selling a little above N1.
However, renewed investors‘ confidence has seen the shares climb by 124 per cent from N1.23 to close at N2.76 in first quarter of 2010, thereby recording the highest recovery in the banking sub-sector.
The second best recovery was recorded by Access Bank Plc, with 47.5 per cent as the equity rose from N7.60 to close at N11.21 per share. Skye Bank Plc appreciated by 46.7 to close as the third best performance.
The share price rose from N5.49 to close at N7.94. United Bank for Africa Plc appreciated by 40.7 per cent, while Zenith Bank Plc, Fidelity Bank Plc and GTBank Plc grew by 39.4 per cent, 38.7 per cent and 34.8 per cent respectively.
Other bank stocks that witnessed recoveries included, Intercontinental Bank Plc (31.6 per cent); Diamond Bank Plc ( 28.3 per cent); FinBank Plc ( 26.4 per cent); Bank PHB Plc ( 25.7 per cent); First City Monument Bank Plc (25.7 per cent); Unity Bank Plc ( 21.4 per cent); Oceanic Bank International Plc ( 18.3 per cent); First Bank of Nigeria Plc ( 16.6 per cent); Wema Bank Plc (11.8 per cent); Afribank Nigeria Plc with 5.4 per cent.
However, two banks, Ecobank Nigeria Plc and Union Bank Plc recorded a decline in their share prices in Q1.Ecobank recorded the highest decline of 34 per cent as the share fell from N10.63 to close at N6.99. Union Bank fell from N6 to N5.76 per share.
Market analysts said that the bank stocks would record more recoveries in the second quarter, as audited results of the banks for the year ended December 31, 2009 begin to hit the market.
Zenith Bank Plc and UBA were the first to announce their 2009 results last week. Though they posted reduced profits, they recommended dividends and bonus shares. While Zenith Bank recommended a dividend of 45 kobo and a bonus of one new share for every four shares already held, UBA recommended a dividend of 10 kobo and a bonus of one share for every five shares already held.