As investors and stakeholders in the Nigerian capital market await second quarter results of banks, some analysts in the financial sector have predicted a single digit growth for some banks.
In a preview of Q2 2014 results, analysts at
"Q1 2014 results showed that our universe of Nigerian banks reported an average Return on average equity (ROAE) of 17.7 per cent compared with full year 2013 ROAE of 18.5 per cent. We expect the banks to report a similar ROAE for full year 2014 as they did in 2013. As such, we believe Q2 will see slight improvements over Q1.
"Notwithstanding, we expect the market's reaction to be muted to slightly positive, given that our full year expectation for ROAE is flattish year on year(y/y)."
According to them, besides revenue growth, they believe an easing of operating expenditure(
"Q1 opex can be unusually high as we saw this year (over and above year-end effects such as
Even as concerns of a slowdown in H2 for loan growth increase, we believe lending opportunities are generally greater than they have been in the past such that banks will be able to meet their guidance, "they stated.
The analysts pointed out that so far, it appears that the recent change of guard at the central bank is unlikely to lead to a worsening regulatory environment.
They, however, stated that the changes put into motion by the previous governor are still being felt by the banks.
"As such, offsetting this positive outlook for risk asset growth is the continuing impact of these regulatory headwinds which will most likely be visible till at least 2016. Our preference going into the Q2 reporting season are those banks which have visible earnings momentum such as Access (rated outperform) and
"Although we also like
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