Do you think the intercontinental bank offer will be a good investment?

[webadmin]

I was wondering if any one has any thoughts on this

[Dapso]

It should, based on there past performance index.
I think it should be a good buy to investors anyday

[demolabiala]

i honestly do not have any doubt in my mind that it will be a great buy if one invests in it. it's figures have never been a fluke and to prove this, you only have top put in a lil of your money and see it grow!!
happy investing.
demola

[Akusoba Chris]

pls,i need an information about access bankplc.i want to know whether it is a good buy.
Chris

[windywendy]

Chris, I looked at access bank earlier this year and decided it was NOT a good buy for the following reasons:

1) they are technically illiquid. Their working capital is negative, and so is their cashflow from operations -- in other words, their business is not generating any cash. That to me is a NO NO for any potential investment.

2) I don't think they have the type of branch network that will enable them generate the type of deposits they will need to earn some serious returns on investment. This is my opinion, 'cos in the new banking environment I believe the size of the branch network will determine whether or not a bank gets any serious business from big clients. For instance, I think one of the reasons a company like western union established joint ventures with first bank is becos of its branch network.

3) I'm not too keen on the quality of management those guys have in place. I really don't see any innovative products being introduced, and they don't strike me as being aggressive (unlike Zenith for instance)

[windywendy]

@webadmin:

To be honest, I'm not too keen on intercontinental. They have way too many shares outstanding and this makes it difficult for them to pay any meaningful dividend despite their "impressive" performance on the books. Not that it's a bad stock, but I'll only buy a stock like that if I have run out of better alternatives.

For me the criteria for investing in today's banking sector would be first and foremost the size of the branch network, since everyone now has enough capital. Intercontinental is not too bad in that regard, but there are better alternatives. Secondly, I will look at other businesses it is engaged in, such as wealth management (or asset management), access to foreign capital etc and how innovative they are in terms of product introduction. Again Intercontinental is not too bad, but there are better alternatives at that price. Also I will look at management quality and the quality of the balance sheet. Again they're not too bad, but could be better -- for instance i'm not too impressed by the amount of bad loans they have outstanding and the % of loans that belong to insiders. That to me spells trouble. Then again, I'm uncomfortable about the fact that the bank seems to revolve around akingbola. What happens if he resigns tomorrow or drops dead?? the guy wanted to resign but the directors told him not to bcos they didn't have anyone that can step into his shoes and sustain the bank's performance. That's troubling.

Bottomline: it's not too bad an investment, but I wouldn't do it unless i've run out of alternatives.