Access bank, over the years has maintained its focal, assets quality and cost management, which had continued to pay off considering its recent financial figures released to the Nigerian Stock Exchange (NSE). It has evolved from being one of the many Nigerian banks to being a top three bank across many performance metrics. The main driver behind the strong earnings growth was a significant reduction in loan loss provisions, which offset a 10 per cent decline in non interest income in the first quarter of 2017.
Analysis of the bank’s finance showed that its balance sheet remained strong with a total assets standing at N3.54 trillion at the end of first quarter, compared to N3.48 trillion recorded as at December 2016, showing the final amount of all gross investments, cash and equivalents, receivables, and other assets. Its derivative assets rose from N156 billion as at December 2016 to N161 billion, representing an increase of 3.2 per cent, while its investment in subsidiaries, properties and equipments increased by 2.5 per cent from N84.1 billion to N86.2 billion. Its income from derivative instrument has been a topical line item around the bank’s earnings in recent years. The income line offsets the impact of currency devaluation on its foreign currency liability and has consistently supported non-interest income.
The bank’s capital adequacy and liquidity ratios, which are a class of financial metrics used to determine a bank’s ability to pay off its short-term debts obligations, remain 21 per cent and 46.3 per cent respectively, more than the minimum regulatory requirement of 15 per cent and 30 per cent. The higher the value of the ratio, the larger the margin of safety a bank possesses to cover short-term debts. The bank raised a $300 million 5-year Eurobond at 10.5 per cent in October 2016 in a bid to support its foreign exchange liquidity, which continues to enhance its balance sheet.
Access Bank Plc has reported an impressive first quarter profits, showing improvement in performance indicators. The bank’s unaudited financial results for the first quarter ended March 31, 2017 showed an increase of 38 per cent in profit before tax, to N31.2 billion when compared to N22.6 billion in the first quarter of 2016. The bank’s profit after tax rose 34 per cent to N26.0 billion in 2017, up from N19.4 billion in the corresponding period of 2016.
The profit was recorded from gross earnings of N116 billion, which showed an increase of 44 per cent compared with N80.3 billion in 2016. Interest income and non-interest income contributed 68 per cent and 31 per cent respectively to the gross earnings. Although loan growth remains subdued in the first quarter and some key fee income businesses have been weak (e-business), margin expansion and gains on foreign exchange and derivatives have more than compensated. Funding income should remain strong in the near term, supported by relatively high yields on treasury bills.
Key highlights of the 2016 full year report ended December 31, 2016 showed that pretax profit of the lender appreciated 20 percent to N90.3 billion from N75.4 billion recorded in the 2015 end. Also, it reported post-tax profit in the review period climbed up 9.23 percent to N90.3 billion from N75.0 billion posted a year ago. Gross earnings of the lender increased from N337.4 billion in 2015 end to N381.3 billion in the review period of 2016, indicating a rise in gross earnings of 13.05 percent.
The bank continued to focus on de-risking its portfolio, building a consolidated business, expanding its international network, and driving efficiency through technology innovation in a bid to successfully navigate the tough operating environment. Asides restructuring existing loans, the bank has been cautious about risk asset creation – maintaining a zero exposure to the troubled power sector whilst restricting credit to quality names across other sectors. The bank continues to focus on enhanced technology and innovation to drive efficiency as the bank looks to contain its relatively high operating cost (coming from a high cost base post acquisition of Intercontinental Bank).
The Group Managing Director of Access Bank, Mr Herbert Wigwe said that 2017 marks the end of the bank’s third five-year transformation journey and in the coming months, it priorities is delivery of strategic objectives.
He said, “We will continue to improve on profitability and shareholder value by maintaining our capital and liquidity positions, assiduously implementing our cost management strategy, and exploiting retail business opportunities using our digital platforms and deepening market share of the wholesale business.”
Wigwe assured stakeholders that the bank was now stronger and well positioned to deliver long-term value to its stakeholders. According to him, although the macro-economic conditions and corresponding implications on the banking industry remain uncertain, the bank’s diversified banking model, robust balance sheet and solid management team give it the strength and resilience that will keep the financial institution in good stead.
“By diligently executing our strategy, we will continue to maintain improved profitability and create the capacity to continue to invest in our key areas of strength. As we come to the end of our third five-year transformation journey, our top priority in the coming year will be to cement our position as a dominant corporate bank and establish ourselves as a formidable retail player, leverage digital technology and innovation to create value for our customers whilst unlocking new revenue streams and deliver seamless and superior customer experience across all our service touch points,” he said.
Access Bank Plc, a full service commercial bank operating through a network of about 305 branches and service outlets located in major centres across Nigeria, Sub Saharan Africa and the United Kingdom, was listed on the Nigerian Stock Exchange in 1998. The bank has continued to serve its various markets through four business segments: Personal, Business, Commercial and Corporate & Investment banking.
The bank, with over 830,000 shareholders including several Nigerian and International Institutional Investors, has enjoyed what is arguably Africa’s most successful banking growth trajectory in the last ten years ranking amongst Africa’s top 20 banks by total assets and capital in 2011.
As part of its continued growth strategy, the bank focused on mainstreaming sustainable business practices into its operations, striving to deliver sustainable economic growth that is profitable, environmentally responsible and socially relevant.
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