Shares in Zenith Bank fell for a second session in a row on Friday after the lender declared a lower than expected interim dividend, despite a sharp rise in first-half earnings.
The top tier Nigerian lender said late on Thursday its pretax profit in the first six months jumped 71 percent to 92.2 billion naira ($264 million) and it declared 0.25 naira interim dividend.
“Some investors sold their holding in the bank after the disappointing dividend,” said Austin Egberi of Fund Matrix & Assets Management.
Traders said investors were expecting a higher payout at the half-year point to continue holding the stock, which had doubled in value by the end of July from its 2017 low hit on March 13.
The stock fell 1 percent to 23.75 naira on Friday, the lowest since July 26.
“Zenith lost today despite the release of better than expected H1 earnings,” Vetiva Capital analysts said. “We believe that the declines might be attributable to profit taking.”
Stanbic Stockbrokers upgraded its target price to 28.60 naira from 25 naira and forecast the bank’s full-year pretax profit would come in at 184 billion naira, up 18 percent.
Zenith raised $500 million Eurobond in May which could increase its funding costs, Stanbic said.
Dollars have been in short supply in Nigeria since the price of oil, the country’s main source of hard currency, plunged in 2014, triggering a currency crisis, an exodus of foreign investors and the first recession in 25 years. ($1 = 364.90 Naira)