Afribank Nigeria Plc is one of the few top Nigerian banks with moderate 13.5 billion outstanding shares in issue being the sixth highest in the industry. The average outstanding share in issue for the banking sector is 17.63 billion shares as at May, 2009. Afribank is able to maintain this minimal level of dilution because the bank does not engage in cultural bonus shares declaration frenzy. Consequently, the bank’s per share data looks quite attractive. The bank’s average EPS growth rate between 2006 and 2008 stands 361% while the bank’s last dividend cover was 2.26 in 2007.

The bank’s return on shareholders’ funds steadily increased from 2.79% in 2005, through 9.23% and 16.88% in 2006 and 2007 respectively to 25.38% in 2008. The bank is renowned for its relatively high return on shareholders’ fund and steady increase in earnings per share (DPS) since 2005. The bank has been able to grow its revenue and profit after tax by 67.79% and 41.98% respectively in the last five years (CAGR). The bank’s H2 2008 unaudited quarterly results reflected 122.72% and 121.42% Year-on-Year growth in turnover and PAT respectively. If this tempo is sustained the bank is set to maintain its great steps to greater heights with steady increase in key performance indices since 2005.

On management strategy, the bank recently open a Group Office in high brow Lekki Phase 1 , Lagos to house its BDC, Real Estate, Trustee and Capital Market operations. The new group office is complemented with a banking hall and located adjacent Zenith Bank. The bank seems poised to compete favourably with second generation banks and time would tell how well they have fare. However, historical price data reflects newly found investor confidence in the bank as a review of the banks price trend between Jan – May 22, 2009 indicates that the 60 day Simple Moving Average (SMA) of 6.27 accelerates towards its 90 Day SMA of 6.54 and would soon peck and cross its 120 day SMA of 8.0; this is indicative of a bullish rally ahead.

Disclaimer: The opinions contained in this article should not be interpreted as an offer to sell, or a solicitation of any offer to buy any investment. Whilst every care has been taken in preparing this write up, no responsibility or liability is accepted

This entry was posted on Wednesday, June 3rd, 2009 at 5:47 pm and is filed under StockMarketNigeria. You can follow any responses to this entry through the RSS 2.0 feed. Tags: Afribank, ApprovedO, Ogunyemi Olumade
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