Investors in the stock market are expectant that the impending release of the half-year results of the nation’s leading banks will dictate the direction of the market and subsequent portfolio realignments for the third quarter.

Major investment pundits said the performance of the “big banks” and the direction of yields at the fixed-income market would determine the financial markets’ patterns in the weeks ahead.

Five leading banks – Guaranty Trust Holding Company (GTCO), Zenith International Bank, United Bank for Africa (UBA), Access Bank and Stanbic IBTC Holdings – are expected to release their half-year results in the next few days.

The five first-tier banks control more than two-thirds of the banking industry and traditionally have major influence on the direction of the investment market.

Post-listing rules at the Nigerian Exchange (NGX) require quoted companies to submit interim or unaudited quarterly report not later than 30 calendar days after the end of the relevant period. Most quoted companies, including  banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar year as their business year.The deadline for the six-month period ended June 30, was thus July 30, 2022.

However, where a company chooses to audit its quarterly accounts, it shall be required to file such accounts not later than 60 calendar days after the relevant quarter.

The leading first-tier banks run a distinctive pattern of auditing their half-year results and payment of interim dividends on the six-month earnings.The deadline for the submission of their accounts is thus August 29.

The Nation’s investigation at the weekend indicated that the directors of the first-tier banks have approved the financial statements and the results are undergoing approval processes at the Central Bank of Nigeria (CBN); in line with extant approval rules. Banks, insurance companies and other regulated financial services companies are required to obtain the approval of their primary regulator for their financial statements before the release to the investing public.

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There are indications that some of the banks are at the final stage of the three-step announcement process and the results ay trickle in ahead of the deadline.

Under the three-step final process for the release of dividend recommendations and audited reports, the board of directors meets to consider and approve the audited financial statements as well as dividend recommendation, then authorises the transmission of the signed reports to the primary regulator, in the case of financial institutions and other regulated entities and with the receipt of the approval of the primary regulator, transmits the dividend recommendation and audited report to the Securities and Exchange Commission (SEC) and the NGX for announcement to the investing public.

Regulatory filings at the weekend also showed that the five banks would sustain their tradition of interim dividend payment, a major indicator for dividend-minded retail investors who account for nearly one-third of domestic investors’ trading on the stock market. Domestic investors account for more than 85 per cent of transactions at the stock market; according to the latest NGX data.

The boards of Access Bank and Zenith Bank stated that its approved half-year results included recommendations for interim dividend payments.

The board of Stanbic IBTC stated that it aimed at publishing its half-year audited results on or before August 29, 2022 in line with the extant rules.

Market analysts agreed that half-year results of the leading first-tier banks would have a major influence on the overall share pricing trend in the next few days.

Analysts at Cordros Securities said they expected “cautious buying actions from dividend-yield-seeking investors amid intermittent profit-taking activities” in the days ahead.

A market intelligence report by The Nation had shown that at the last audit; total assets of publicly quoted banks had risen by some N10 trillion to about than N70 trillion, with average growth in the banking sector at about 17 per cent.

The report indicated that total assets of the publicly quoted banks rose by about N9.99 trillion from N60.37 trillion in 2020 to N70.36 trillion in 2021, representing an increase of 16.55 per cent.

The report was based mainly on the audited reports and accounts of the 14 publicly quoted banks, including the main first tier banks, nationally regarded as systemically important banks. The publicly quoted banks account for more than 90 per cent of Nigeria’s banking operations and mirror the sectoral performance.

The banks included the six largest banks – Access Holdings Plc, Ecobank Transnational Incorporated Plc, Zenith Bank International, United Bank for Africa (UBA), GTCO and FBN Holdings.

Other banks included FCMB Holdings, Wema Bank, Union Bank of Nigeria (UBN), Sterling Bank, Stanbic IBTC Holdings, Jaiz Bank, Fidelity Bank and Unity Bank.

A review of the audited financial statements indicated that the assets’ growth was driven mainly by improving profitability of the bank, rather than issuance of additional share capital.

A bank’s audited report goes through four major layers of approvals and is regarded as a reflection of operational performance of the bank. These approvals included by the Board of Directors, Central Bank of Nigeria (CBN), capital market regulators and shareholders. Besides, corporate governance rules provide institutional and personal liability for the bank and its directors in the event of any misstatement.