Equity Analysis /
Sub Sahara Africa

ACCESS BANK: Q3 17 review - core drivers lag management targets; reiterate HOLD

    Tellimer Research
    27 October 2017
    Published byTellimer Research
    Valuation now a fairer reflection of risk. We recently downgraded Access Bank to HOLD (from BUY) on account of valuation. Access Bank’s 9M 17 results, for the most part, reflect our key concerns with the bank, which are that (1) profitability remains disproportionately reliant on FX trading revenue, (2) the bank’s strong and growing deposit franchise costs much more than that of close peers, and (3) cost management compares poorly to other Tier 1 banks. These key factors translated into a weaker profit profile for the bank during the period, as detailed below. That said, Access maintains strong asset quality and capital ratios well above regulatory limits.