Staff Writer
Stockbroking firm Simonis Storm has maintained its buy recommendation on SBN Holdings following the bank’s 2025 financial results.
The firm said the bank delivered higher earnings despite pressure on margins, weaker non-core revenue and a subdued economic environment.
Asset quality improved during the year. Excess liquidity was redirected into customer lending, which strengthened the balance sheet.
SBN reported a profit after tax of N$1.187 billion, extending the level reached in 2024 when it passed N$1 billion in annual earnings.
Simonis Storm said the bank’s performance shows it can deliver earnings across different market conditions.
“The debate is no longer whether SBN can earn through the cycle. The 2025 financial year confirmed that it can,” the research note stated.
The firm said the market is undervaluing the bank. At a share price of 1 271 cents, it said SBN is being priced as a low-growth bank with a return on equity of about 17%.
Simonis Storm expects earnings to stabilise and return on equity to remain close to 20%.
The firm has set a 12-month price target of 1,450 cents per share.
It said this is based on valuation models that reflect the bank’s projected 2026 book value and earnings.
The brokerage estimates a potential total return of about 26% over the next 12 months, including a forward dividend yield of 11.8%.
Simonis Storm said net interest income grew despite pressure from interest rates, while credit quality improved.
Operating expenses declined and loan growth outpaced private sector credit extension.
The bank’s capital adequacy ratio stood at 18.3%, reflecting a strong capital position.
The firm said its outlook is based on stable earnings supported by a stronger loan book, improved asset allocation and a more balanced revenue mix.
