Zenith Bank Plc, Access Bank Plc and United Bank for Africa Plc are among five Nigerian lenders that Exotix Ltd. recommends buying because of their valuations and growth potential.

“We strongly believe that now is the time to have a strong bias toward Nigerian banks,” Kato Mukuru, an analyst at Exotix Frontier Equities, said in an e-mailed note to clients. “Nigeria also offers something that few sub-Saharan African banking systems can hope to offer — scale.”

Almost half of Nigeria’s more than 170 million people don’t have access to finance, according to the country’s central bank.

With loan penetration increasing by only 5 percentage points over the past 10 years, the potential for asset growth in Nigeria is probably much larger than in other parts of the continent, said London-based Exotix, which started building an Africa equity team last year.

Zenith may improve its return on equity to 22.4 percent by 2017 from the 19.6 percent that Nigeria’s third-largest bank by market value reported last year, Exotix said.

Barclays Bank of Zimbabwe Ltd., Standard Chartered Bank Ghana Ltd. and Ghana Commercial Bank Ltd. are Exotix top sell recommendations, Mukuru said.

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