May 18, 2023/Cordros Update

We update our views on ACCESSCORP (BUY, TP: NGN13.80), ZENITHBANK (BUY, TP: NGN34.69) and GTCO (BUY, TP: NGN31.73).

For ACCESSCORP, we increase our 12M target price by 2.6% to NGN13.80/s (previously: NGN13.45/s) and maintain our “BUY” rating. The upward adjustment in our TP reflects our expectations of an improved financial performance, supported by increases in interest rates and continuous increases in the group’s interest-earning assets. Additionally, we expect the successful transition into a HoldCo structure to positively impact its earnings growth. However, we expect the lingering weak macroeconomic story to weigh on the group’s earnings in 2023E.

For ZENITHBANK, we increase our TP marginally by 1.0% to NGN34.69/s and maintain our “BUY” rating on the stock. The rise in our target price is primarily driven by our optimisim that the elevated fixed income yields will drive funded income in 2023E. In addition, we believe risk asset creation and a sturdy non-interest income growth will support stronger income growth. However, we note that the challenging business environment still poses potential risks to the bank’s financial performance.

Similarly, we increase our TP for GTCO slightly by 0.1% to NGN31.73/s and our “BUY” rating on the stock. The increment in our 2023E TP is based on our outlook that the Holdco’s earnings growth will maintain its positive trajectory buoyed by the elevated yield environment and continuous cost management. In our estimates, we factored in elevated inflationary pressures on the Holdco’s performance during the period.

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