We adjust our FY'24 estimates for FBNH to reflect the impact of the elevated interest rate environment and potential improvements in cost-of-risk (CoR). These adjustments should cascade to a c.88.1% YoY increase in PAT to N583.95 billion in FY’24E, aided by an expected surge in net interest income (NII) to N1.0 trillion (+84.6% YoY) and a modest uptick in non-interest revenue (NIR) to N625.8 billion (+4.0% YoY). Additionally, we forecast CoR at 1.8%, in line with management's guidance of below 2.0% and lower than the Q1'24 level of 2.2%. Our CoR expectation is also below the elevated 3.4%1 recorded in FY'23. The projected CoR level should be supported by lower impairment charges and an increase in gross loans, both of which bode well for after-tax earnings and ROE (+6.2ppts to 28.8%).
