ZENITH recorded a 44.57% growth in interest income in H1-17. On our 12.98% estimated assets yield, we believe the run rate will be sustained for the rest of the year, equating to 36.38% y/y growth in interest income to N524.46 billion. The bank's portfolio of investment securities, treasury bills, and quality loan books will be catalysts of the growth in assets yield.
While acknowledging the impressive performance across income lines in H1-17, which resulted in an upward revision in earnings for the year, we believe the revaluation-bloated growth in NIR will taper in 2018, and factoring in the impact of the adoption of IFRS 9 from 2018 (with management guiding to a 20% impact on credit loss provision and 1% drop in CAR), we now expect PAT to grow lower than previously estimated over 2018F-2019F. Hence, we revise our target price on the stock downward to N27.18.