Dear
Afrinvestor,
Please
find below our Research
Note expressing
our initial thoughts
on the recently
released Q3 2012 results by Diamond
Bank Plc.
Diamond Bank recently released its unaudited Q3 2012
results, displaying a 47.5% year-on-year (y-o-y) rise in Gross Earnings from
N74.6bn to N110.1bn, while PBT and PAT surged to N23.2m and N18.2m from the
respective losses recorded in Q3 2011. Compared with our un-annualized
forecasts, Gross Earnings exceeded our N95.2bn estimate by 15.1%, while
our PBT estimates of N23.7bn surpassed the lenders figure by 2.0%. Our PAT
forecast of N18.0bn was however in tandem with the banks announced figure
albeit with a 0.7 negative variance.
With an average P/BV of 0.6x, Diamond Bank trades at a
slight discount (9bps) to its peers, trading at an average P/BV of 0.7x (spiked
by a single lender). We however remain BUYERS of the
franchise with a trailing EPS of N1.23, translating to a P/E of 3.6x trailing
earnings. Our forecasts currently indicate an intrinsic value of N5.91,
yielding a FYE2012 target price of N8.07 (an upside of 80.5%).
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