October 28, 2025/Cordros Report
Following the release of ACCESSCORP’s H1-25 results, we have revised our outlook and estimates for the group. The HoldCo delivered a solid topline performance, with funded earnings rising by 38.9% y/y. Nonetheless, profitability weakened, driven by a sharp contraction in trading gains on equity (-96.3% y/y) and fixed income (-69.7% y/y) instruments. As a result, we now project a sizeable decline in 2025E EPS to NGN8.36 (Previous: NGN14.42) given our expectations of a 90.0% y/y decline in fair value gains on the group’s equity securities. In addition, with no interim dividend declared, we lower our gross DPS forecast to NGN2.45 (Previous: NGN3.00), implying a dividend yield of 10.4% based on the stock’s last closing price of NGN23.65/s. Consequently, our model now points to a year-end target price of NGN28.07/s (Previous: NGN35.28/s), indicating a “HOLD” rating and a modest upside potential of 18.3%. Our estimates suggests that ACCESSCORP is trading at a 2025E P/E and P/B estimates of 2.8x and 0.3x, respectively.
Non-core performance to weigh on earnings: We now expect a marginal increase of 3.4% y/y in the group’s earnings (Previous: +20.1% y/y), as we now project a 29.8% y/y decline in non-funded income (previous: -9.9% y/y) which will outweigh our anticipated 14.0% y/y increase in core earnings. We also increased loan loss provisioning for 2025E (+48.5% y/y to NGN364.36 billion) as the group is expected to book higher impairment charges to resolve forbearance exposures. That said, the group’s sound risk management framework should help keep asset quality stable, with the non-performing loan ratio forecast to remain below 3.0%. On the cost side, funding expenses are projected to rise marginally by 1.1% y/y as the lower interbank placements (-39.7% y/y) provide relief to the line. Meanwhile, we maintain our projection of a 16.9% y/y growth in OPEX, reflecting persistent inflationary pressures and rising regulatory costs. Overall, we see profit before tax and profit after tax declining by 33.2% y/y and 30.6% y/y, with EPS settling at NGN8.36 (-50.0% y/y) for 2025E. We model a 15.7% average growth rate in EPS over the forecast horizon.
NIM recovery, a positive for ACCESSCORP: ACCESSCORP recorded a subpar NIM of 3.6% in Q1-25 (Q1-24: 6.5%) buoyed by high funding costs in the quarter. Nonetheless, the group made a marked recovery in H1-25, recording a NIM of 7.8% (H1-24: 5.5%). We believe this stemmed from the reduced deposit base of the HoldCo in the second quarter (-4.2% q/q to NGN27.84 trillion), providing support to the group’s topline. We expect this initiative, if sustained, to serve as a positive for bottom-line amid the moderating non-core earnings. We also observed higher credit creation (+1.8% q/q | Q1-25: -4.6% q/q) and increased government securities holdings (+3.4% q/q | Q1-25: -4.9% q/q), both of which we expect to maintain ACCESSCORP’s strong asset yield (2025E: 13.8% 2024FY: 18.3%).
Valuation: Our year-end target price of NGN28.07/s was derived using a blended valuation framework comprising the Dividend Discount Model (DDM, 30%), the Gordon Growth Model (GGM, 60%), and relative valuation approaches based on P/E (5%) and P/B (5%) multiples. Under the DDM, we assumed a cost of equity of 26.4% and a payout ratio of 29.3%, arriving at a fair value estimate of NGN24.70/s. For the GGM, we retained the same cost of equity, applied an average return on equity of 11.8%, and obtained a fair value of NGN29.44/s. On a relative basis, applying our Tier-1 peer average P/E multiple of 2.0x to our 2025E EPS of NGN8.36/s yielded a fair value of NGN16.92/s. Similarly, using an estimated forward book value per share of NGN81.69/s and the peer average P/B multiple of 0.5x resulted in a fair value of NGN43.09/s.
