DIAMOND BANK NIGERIA PLC (DIAMONDBNK)
- The ticker pared by 0.89% to bring the YtD return to -20.25%, as volume and value of transactions advanced by 5.84% and 5.36% respectively.
- Despite the bank’s recently weak financial performances, we are of the opinion that the ticker is trading below its fundamentally justified worth, and advise investors with a medium to long- term horizon to consider the ticker.
- The bank recorded gross earnings, PBT, and PAT growths of 3.47%, -9.45% and -15.14%
respectively. Also, there was a marginal growth in loans of 2.52%, as deposits declined by 6.22%.
- This performance was due to a combination of growths in interest expenses and operating expenses, which decimated the trickle-down from the top-line to Earnings.
- Although we are not encouraged by the bank’s recent earnings releases, we expect a stronger year from the bank in 2015, provided expenses are better managed.
TP N 6.05 Expected Return: 38.4%
FCMB PLC (FCMB)
- The ticker pared by 1.59% to bring the YtD return and price to 24.10% and NGN3.90, as volume and value of transactions declined by 10.38% and 11.08% respectively.
- The ticker is the second best performing ticker this year, second to only UBA, which is justified given the Holdco’s strong recent financial performances, which we anticipate will persist in the short to medium-term.
- The bank grew Profit before tax (PBT) by NGN5.8bn for the first quarter 2015, up 4% from
NGN5.6bn for the first quarter 2014.
- Net interest income of NGN18.1bn, for the three months ended March 2015, an increase of 8% Year-on-Year (YoY), from NGN16.7bn in the previous year.
- We expect the bank’s performance to remain impressive in 2015, despite the anticipated challenges from the operating environment
- TP N 3.7 Expected Return: 23.3%
ACCESS BANK NIGERIA PLC (ACCESS)
- The ticker pared by 0.95% during the week to peg the YtD return at -5.61%, as the volume and value of transactions advanced by 39.49% and 39.27% respectively.
- The ticker has remained pressured since it was marked down for dividend. We believe this may persist until the bank in the short-term until a possible interim dividend declaration.
- Gross earnings in Q1:2015 grew by 34.08%, an impressive feat achieved on the back of the 26.69% and 71.64% growths in interest and non-interest income in that order
- Net interest income increased at a rate of 10.20%, as interest expenses grew significantly by 49.86%, owing to increased cost of borrowing and relatively higher expenses on deposits
- YoY PAT growth pegged at 17.56% for the year, a performance which we expect will be tempered in 2015 as the effect of trading income reduces significantly
TP N 8.75 Expected Return: 41.6%