The safest banking stock on the Nigerian Stock Exchange (NSE) for the week ended February 27 was the Skye Bank stock, BusinessDay findings have shown. This is despite the battered state of most stocks following the recent negative portfolio outflow from the Exchange.
The metric for determining safety by finance analysts is the Beta, a measure that gauges a stock volatility or risk level. The Financial Times displays the daily beta of all quoted firms and is the source of this finding.
The FT shows a beta of 0.84 for the Skye Bank stock on February 27, the lowest in the Banking Sector of the NSE, indicating that it has the least volatility among banking stocks. Last week was an improvement on the previous week when the bank coasted home as the second least volatile with equivalent beta figure of 0.837.
Following on the heels of Skye Bank is Eco Transnational International (ETI) with a score of 0.89 and StanbicIBTC with a score of 0.95.
Sterling Bank led the way with banks with the highest beta with a beta of 1.89, followed by UBA with a beta of 1.76 and Diamond Bank with beta of 1.7. Diamond Bank was the least volatile the week before with beta of 0.63.
FCMB had beta of 1.37; Wema Bank, 1.2; Union Bank, 1.19; GT Bank, 1.12, while Access Bank, First Bank and Zenith Bank had betas of 1.09, 1.04 and 1.02, respectively.
It would be recalled that Skye Bank recently acquired Mainstreet Bank in a little above N126 billion deal that analysts say would catapult the bank into first tier competition once integration is complete. According to the bank, the purchase would help cement its aspiration to play big in the retail and commercial segments of the banking business.
Providing further insight, the bank had in a statement after the acquisition said the move will bring valuable synergies from the mutual focus areas of commercial and retail banking of the two entities in a larger Skye Bank. According to the bank, its focus is on retail and commercial banking, which are also the main focus areas of Mainstreet Bank Limited.
Speaking on the acquisition, CEO, Timothy Oguntayo, said the increased branch network would make the bank’s services easier as branches were now easily accessed by its over 5 million customers, saying the bank had strongly established its presence in the South-South, South East and the North owing mainly to the acquisition.
BALA AUGIE
