Equity Analysis /
Nigeria

NIGERIA BANKS: The giants are not for toppling

    Tellimer Research
    21 September 2017
    Published byTellimer Research
    In this note we update our earnings estimates and target prices for our universe of tier 1 Nigerian banks (Access Bank, FBN Holdings, Guaranty Trust Bank, United Bank of Africa and Zenith Bank). The valuation gap between Nigerian tier 1 banks trading at 1.1x FY17f book and the broader frontier peers, trading at 2.1x FY17 book, is still wide even after recent rally, while the profitability of the tier 1 banks has outpaced that of frontier peers, and consistently so through the post-crisis period. We consider that current share prices still present decent entry points for the tier 1 banks versus other sectors.