Here is Afrinvest’s take on First Bank’s recently released half year earnings report.

Earnings Update Report on First Bank Plc which highlights the latest interim results and an update on our Full Year ’10 earnings outlook on the company.

Q2’10 Results:

1. First Bank reported a 6.7% decline in gross earnings to N122.3bn (US$812.6m) from N131.1bn (US$871.1m).
2. PBT however went up by 637.4% to N31.7bn (US$210.6m).
3. The bank recorded a profit margin of 25.9%, an improvement from the 24.7% recorded in Q1 ‘10.

FY’10 Outlook:

1. This recent performance reveals the challenges faced by many banks in growing top-line numbers as a result of a slowdown in credit expansion, amongst other factors.
2. We reiterate our positive stand on the bank’s earnings potential riding on the back of its strong balance sheet.
3. We however review our forecast of gross earnings down from N277.6bn (US$1.8bn) to N249.8bn (US$1.7bn) while we review PBT up from N51.2bn (US$340.2m) to N56.3bn (US$374.1m). We also establish a 12-month price target of N17.50 and upgrade our recommendation on First Bank to a BUY.

You can download the report below:
Afrinvest – First Bank 6M 2010 Report