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Access Bank sustains positive market reactions following first half 2016 audited financial result

Access Bank GMD, Herbert Wigwe
Access Bank GMD, Herbert Wigwe

Following the release of Access bank’s second quarter result on August 19 2016, a cross section of market analysts have expressed faith in the bank’s ability to sustain the growth and even surpass the projections for 2016 financial year earnings.
The bank’s first half 2016 audited financial result has continued to generate positive reactions from the Nigerian capital market as the bank’s stocks continued to attract higher demand resulting to sustained price appreciation.
The result which recorded 37.7 per cent growth in net interest income year on year to N33.8 billion, a 21.4 per cent year on year growth in profit before tax to N27.4 billion and profit after tax growth by 13.9 per cent to N20.1 billion, experts maintained, remained the guide to assert that the bank would certainly out perform its 2016 guidance and sustained out performance of the market’s All Share-Index (ASI).
Riding on the back of interim dividend of N0.25 per share, which represents a dividend yield of 4.68 per cent based on the closure price on August 19, 2016, market stakeholders have said that the bank is billed to sustain its growth strategy for the second half of the year.
A cross section of stockbrokers expressed confidence in the ability of the bank to outperform its projected earnings for the 2016 financial year, while FBNQuest Analyst in its post release of result reaction notified of upward review of its 2016 projected earnings for the bank.
The analyst company increased its 2016-17Earnings and profit before Tax (PBT) estimates by an average of 22 per cent to a new 2016 E PBT forecast of N96billion which implies a y/y growth of 28 per cent.
The report noted that despite the continued strong fx swap income, it still expects non-interest income to be down y/y (-9%) due to base effects (2015 growth was +90% y/y).
The analyst retained its healthy revenue expectations for Access Bank in 2016, which is expected to be supported with a forecast -5 per cent y/y decline in opex. “We expect these to more than offset a marked rise in loan loss provisions (+61% y/y; based on a 1.5% cost of risk assumption) to lead to our double-digit PBT growth expectation” the report noted.
The report increased its Access Bank’s price target by 26.3 per cent to N9.7 Year to date, Access Bank has gained 21 per cent, outperforming the market by almost 24 per cent. FBNQuest forecast a new price target which implies further growth potential of 65 per cent.
A Lagos based stock broker insisted that Access Bank’s strategy has continued to generate positive earnings and sustained returns on investments to shareholders and that this would spur further growth in the successive quarters, ending in a more profitable 2016 financial year.
“The bank is certain to surpass the guidance for 2016, except there is deviation in government policy which is challenging the industry, which is unlikely,” he said.

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