Earnings Update- ETI- 9M: 2019.

ETI remained on a growth track, recording a growth of 6.67% in gross earnings to NGN610.87bn in 9M:2019. Despite the challenging macroeconomic conditions and lower activities in Nigeria, interest income (+5.20%) and non-interest income (+11.66%) supported growth in topline. Yet again, the bank’s loan remedial strategy proved effective, recovering a sum of NGN45.79bn which led to a substantial decline in impairment charges (-51.00%). Although the cost-to-income ratio worsened by 530bps to 66.40%, the bank was able to record 2.54% growth in PAT to NGN78.84bn. We noted the underwhelming performance of the Nigerian subsidiary owing to the significant decline in activities. Our outlook on the Nigerian subsidiary in the last quarter remains bleak as we do not see any significant improvement that could erode the losses. Consequently, we lowered our 2019 target EPS to NGN3.53 and lowered our projected P/E ratio down to 2.12x, hence, our 2019FY target price of NGN7.48. Kindly find attached the full report.

ETI remained on a growth track, recording a growth of 6.67% in gross earnings to NGN610.87bn in 9M:2019. Despite the challenging macroeconomic conditions and lower activities in Nigeria, interest income (+5.20%) and non-interest income (+11.66%) supported growth in topline. Yet again, the bank’s loan remedial strategy proved effective, recovering a sum of NGN45.79bn which led to a substantial decline in impairment charges (-51.00%). Although the cost-to-income ratio worsened by 530bps to 66.40%, the bank was able to record 2.54% growth in PAT to NGN78.84bn. We noted the underwhelming performance of the Nigerian subsidiary owing to the significant decline in activities. Our outlook on the Nigerian subsidiary in the last quarter remains bleak as we do not see any significant improvement that could erode the losses. Consequently, we lowered our 2019 target EPS to NGN3.53 and lowered our projected P/E ratio down to 2.12x, hence, our 2019FY target price of NGN7.48. Kindly find attached the full report.