Constancy Financial institution Plc, a tier-2 Nigerian industrial financial institution, has dropped out of the elite ₦1 trillion market capitalisation membership, following a pointy decline in its share worth triggered by a Supreme Court docket ruling.
As of market shut on Tuesday, Might 20, 2025, the financial institution’s market capitalisation fell to ₦954 billion, after its share worth slipped by 5% to ₦19.00 from ₦20.00 the day past, based on information from the Nigerian Alternate Restricted (NGX).
The drop got here after Nigeria’s Supreme Court docket ordered Constancy to pay ₦225 billion ($140.6 million) in damages to Sagecom Idea Restricted. The judgment, tied to a long-standing dispute involving the defunct FSB Worldwide Financial institution—which Constancy acquired—spooked traders regardless of speedy reassurances from each the financial institution and the Central Financial institution of Nigeria (CBN).
This marks the second time in Might, the lender has misplaced its trillion-naira standing, though this time the set off was not market sentiment or profit-taking, however regulatory and authorized uncertainty.
“The decline in share worth is most certainly from the preliminary reactions to the Supreme Court docket effective information,” mentioned Nathanael Disu, funding analysis analyst at Afrinvest West Africa Restricted.
He famous that authorized overhangs like this have a tendency to cloud valuation, particularly in a retail-driven market: “The financial institution’s share worth would possibly presumably decide up tomorrow as a result of its monetary efficiency nonetheless stays sturdy.”
Constancy had surged into the trillion-naira membership and valuation tier on April 4, turning into the one tier-2 Nigerian financial institution to hitch the ranks of tier-1 giants like Zenith Financial institution, Warranty Belief Holding Firm (GTCO), Entry Holdings, First Financial institution HoldCo, and United Financial institution for Africa (UBA). With its exit, solely 5 banks stay in that class.
In a press release, the financial institution mentioned that the Supreme Court docket judgment pertains to a legacy transaction and doesn’t mirror the financial institution’s present monetary place. The financial institution additionally famous that it’s pursuing judicial clarification, stating the precise payable quantity could also be nearer to ₦14 billion ($8.7 million).
The CBN additionally dismissed media reviews of chapter, saying “the Nigerian banking sector stays resilient, secure, and sound.”
The timing of the court docket’s determination is critical as Constancy lately reported a 190% year-on-year enhance in after-tax revenue for Q1 2025, reaching ₦91 billion ($56.8 million). The sturdy efficiency helped drive investor confidence and justified its earlier ascent into the trillion-naira membership.
The financial institution can also be in the midst of its recapitalisation drive, as mandated by the CBN’s ₦500 billion ($311.9 million) minimal capital requirement. Analysts beforehand expressed confidence that the financial institution may meet this goal by means of fairness raises, citing its 237% oversubscribed capital providing in 2024 and powerful retail investor assist.
Regardless of a share worth dip, Constancy stays one of the crucial lively shares on the NGX. In accordance with African Inventory Exchanges, a real-time market information platform, Constancy is the second most traded inventory between February 14 and Might 20, 2025, with 2.5 billion shares exchanged in over 31,000 offers valued at ₦47.8 billion ($29.9 million).
Constancy Financial institution’s temporary departure from the trillion-naira membership might show short-term, however it underscores how swiftly authorized and regulatory developments can reshape investor perceptions, even for banks with sturdy earnings and powerful ambition.
*It is a growing story
