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Nigerian Banks Climb for Fifth Day as Investors Look for Gains

Dec. 16 (Bloomberg) -- Nigerian banks rose for a fifth day, the longest winning streak for four months, as investors took positions for “attractive” gains, with the lenders’ financial years ending on Dec. 31, PAC Securities Ltd. said.

The Bloomberg Banking Index, which tracks the performance of the 10 most capitalized banks, added 2.2 percent, the most since Oct. 19, to 263.39 by the 2:30 p.m. close in Lagos. First Bank of Nigeria Plc, the country’s third-biggest lender by market value, gained the maximum daily limit of 5 percent, its highest daily rise since Feb. 8, to 8.40 naira, while Stanbic IBTC Bank Plc, a unit of Standard Bank Group Ltd., gained a fifth day, rising 5 percent to 8.02 naira. Access Bank Plc, which acquired Intercontinental Bank Plc, one of the eight lenders bailed out by the central bank two years ago, climbed 5 percent to 4.65 naira.

“We expect attractive dividends from some of them, given the results they posted in the third quarter,” Eugene Ezenwa, chief operating officer of PAC Securities Ltd., said by phone from Lagos today. “Their prices are low now not because they are not doing well, but because of high interest rates that have shifted attention from equities.”

The Central Bank of Nigeria changed to a December common year-end for all the country’s lenders as part of reforms to the industry after a debt crisis in 2008 and 2009 threatened the banking system of Africa’s most populous nation. The central bank fired eight chief executives of the country’s 24 lenders and set up the Asset Management Corp. of Nigeria to buy bad debts to stabilize the industry.

First Bank posted a 32 percent jump in profit for the third quarter through Sept., it said on Oct. 13., with net income rising to 42.9 billion naira ($265 million). Stanbic reported a 10 percent rise in profit to 7.9 billion naira for the nine months through September, the Lagos-based lender said on Oct. 28. Access Bank Plc reported a 34 percent rise in profit for the nine months through December to 12.81 billion naira.

The banking index has lost 34 percent this year compared with a 19 percent decline in the Nigerian Stock Exchange All-Share Index.

To contact the reporter on this story: Vincent Nwanma in Lagos at vnwanma@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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