Feb. 13 (Bloomberg) -- United Bank for Africa Plc, a Nigerian lender with operations in 19 countries, fell to the weakest level since October 2003 on a selloff, Renaissance Capital said.
The stock retreated the maximum 5 percent to 1.72 naira by the 2:30 p.m. close in Lagos. Trading volumes reached 278 percent of the three-month daily average, data compiled by Bloomberg show.
“There was a huge sell out of the stock, which put it under pressure,” Adesoji Solanke, a Lagos-based Sub-Saharan Africa banking analyst at Renaissance Capital, said by phone today. “This could be linked mainly to the profit warning issued by the bank last week.”
The lender said Feb. 8 it expects to report a loss for the 2011 financial year due to write-offs from the sale of its bad loans to the Asset Management Corp. of Nigeria, set up by the government to bail out the banking industry from a 2009 financial crisis. The bank suspended a planned share sale the following day, citing unfavourable market conditions.
Nigeria implemented banking reforms following a debt crisis in 2008 and 2009 triggered by loans given to stock market speculators. The central bank fired eight chief executives of the country’s 24 banks and set up Amcon to buy the debts and stabilize the banking industry. The central bank introduced a December common year-end for lenders.
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