Access Bank 2020Q3: Robust Numbers For Medium, Long-term Investors

Rating: BUY
Current Market Price: N8.70%
LOAN to DEBT Ratio: 58.43
Year High: N12.00
Year Low: N5.30
Fair Value: N9.96
Equity Analyst: Tunde Segun Jeariogbe


  • This report observes the nine-month financials of Access Bank Plc, Nigeria’s largest bank by assets, for the year ended 30th September, 2020. The result was compared to numbers representing those of the corresponding period in 2019, to establish growth, project expected earnings and perform valuation analyses, using full-year numbers.
  • A close look at the numbers shows that the financial institution built its financial indices to acceptable levels and above those of the comparable period of last year, despite the tough environment in which business had to operate during the period.
  • Although we maintained a highly conservative valuation approach, we are of the opinion that Access Bank will achieve higher valuations in years to come.
  • Kindly see below for other analysis:
BourseNigerian Stock Exchange
Market ClassificationPREMIUM BOARD
Nature of BusinessCommercial Banking
Date of IncorporationFebruary 8th 1989
Date ListedNovember 18th 1998
End of Accounting Year31st December
RegistrarUnited Securities Limited
Share Price@Relsd (N)                                                         8.70
Earnings per Share                                                         2.88
Intrinsic Value(N)                                                         9.96
Share Outstanding35,545,225,622
Market Capitalization                                     309,243,462,911

Company figures

  • As of the end of third quarter 2020, the group reported a total N495.95 billion in Gross Earnings, which was a marginal 1.83% below the N505.17 billion achieved through the first nine months of 2019.
  • Interest Income is valued at N375.28 billion, same as 7.34% below N405.02 billion reported at the end of 2019 third quarter.
  • Interest Expense was estimated at N179.01 billion, slightly above the N194.80 billion stated in the corresponding period of last year.
  • Thus, Net Interest Income is estimated at N196.27 billion, 6.63% below the N210.21 billion achieved in the corresponding period.
  • Operating Expenses is valued at N220.93 billion, far more than the N176.93 billion of prior nine months.
  • Thus, the amount stated as Profit before Tax is N116.62 billion, or 15.69% better than the N100.80 billion posted in its similar result of 2019.
  • After a Tax profit for the period, amounted to N102.30 billion, 15.68% up from the N88.43 billion posted in its 2019 nine-month.
  • Plagued by the negative Non-Controlling interest, Total Comprehensive Income for the period stood at N96.58 billion, a marginal improvement over the N91.74 billion achieved at the end of the previous nine months.
Statement of Comprehensive Income
GROSS EARNINGS               495,956,697,000           505,178,439,0001.83
INTEREST INCOME               375,284,063,000           405,025,433,0007.34
INTEREST EXPENSES               179,010,289,000           194,807,420,0008.11
NET INTEREST INCOME               196,273,774,000           210,218,013,0006.63
OPEX               220,937,480,000           176,936,185,00024.87
DEPRECIATION                 18,659,465,000              14,210,518,00031.31
AMORTISATION                    7,275,015,000                5,403,352,00034.64
PBT               116,622,568,000           100,802,029,00015.69
TAX                 14,322,071,000              12,364,485,00015.83
PAT               102,300,497,000              88,437,543,00015.68
TOTAL COMP INCOME                 96,580,694,000              91,749,227,0005.27
Statement of Financial Position
Total Assets           7,924,720,855,000        6,606,271,074,00019.96
Total Liabilities           7,245,257,626,000        5,991,430,448,00020.93
Net Assets               679,463,229,000           614,840,626,00010.51
Property Plan & Equipment               215,265,446,000           196,410,527,0009.60
Retained Earnings               282,644,393,000           228,826,243,00023.52
Total Deposits           5,994,095,056,000        4,931,102,021,00021.56
Total Loans and Advances           3,502,181,300,000        2,937,802,906,00019.21
  • Access Bank’s Total Assets Valuation improved by 19.96% to N7.92 trillion, compared to N6.60 trillion stated in 2019 nine months.
  • Total Liabilities equally grew by 20.93% from N5.99 trillion to N7.24 trillion.
  • Net Assets also appreciated to N679.46 billion, compared to N614.84 billion.
  • Retained Earnings improved in the same trend to N282.64 billion, as against N228.86 billion.
  • Total Deposits amounted to N5.99 trillion as against the N4.93 trillion posted in the comparable quarter of 2019.
  • Thus, Total Loans and Advances through the first nine months of 2020 stood at N3.50 trillion, higher than the N2.93 trillion reported earlier.

Financial Strength/Solvency Ratios

  • Just like other financial institutions, Access Bank’s Debt Ratio remained high at 91.43%, mildly above the prior year estimate of 90.69%, in other words, more debt was used through the period. Note that Total Deposits was added to the Liabilities figure used in the estimate.
  • We also ascertained that Total Debt for the period can replicate Equity 10.66 times, an improvement over the 9.74 times replicate estimated in 2019 nine months. It is noteworthy that such high ratio is typical of financial institutions.
  • Total Equity was estimated at 8.57% of the Total Asset Value at the end of the quarter, below the 9.31% estimated at the end of the corresponding period of last year.
  • We have currently estimated a Beta value above the market Beta for Access Bank Plc shares. It is important to note that at 1.10 beta value, it is slightly below the 1.11 industry average.
Financial Strength/Solvency Ratio
Debt Ratio91.43%90.69%0.81
Total Debt to Equity Ratio (MRQ)                                    10.66                                   9.749.43
Equity Ratio8.57%9.31%7.88
Beta Value                                       1.10                                   1.110.90

Profitability Ratios

  • Pre-Tax Margin is estimated at 23.51% down by 17.75% from the last estimate of 19.95% at the end of 2019 nine months business session.
  • Interest Expense during the quarter is same as 36.09% of the Estimated Gross Earnings; same as 6.40% reduction from the 2019 estimate of 38.56%
  • Returns achieved on Average Equity used through the quarter was estimated at 15.06%, which is fairly above the 14.38% return achieved in 2019 nine months.
  • See below table for detailed profitability ratios and comparison:
PRE-TAX MARGIN23.51%19.95%17.85
EFFECTIVE TAX RATE12.28%12.27%0.12
IE TO GE36.09%38.56%6.40

Efficiency Ratios

  • Operating Expenses is estimated at 44.55% of Gross Earnings Value for the quarter, which is a 27.19% drop in efficiency when compared to the 35.02% estimated from 2019 nine months numbers.
  • Similarly, Gross Earnings was estimated to be 6.26% of Total Assets, a marginal 1.93% drop in efficiency when compared to estimate from the corresponding quarter.
  • Total Loan to Deposit Ratio achieved at the end of the quarter stood at 58.43% down from the 59.58% achieved in 2019 third quarter.
OPEX TO GE44.55%35.02%27.19
GE TO TA6.26%7.65%18.16
Capex/Share                                       1.26                                   6.0879.27

Investment/Valuation Ratios

  • At the end of the 2020 third quarter, Access Bank earned N2.88 on each unit of its listed shares, the same as 15.68% growth from the N2.49 earned in the similar quarter of the 2019.
  • Also, Total Comprehensive Income per share improved by 5.27% to N2.72, compared to N2.58 in the preceding nine months.
  • Our adjusted third-quarter P/E-Ratio adjusted up to 1.01x, versus 0.98x in the corresponding quarter.
  • The current Earnings Per Share is same as 33.08% of the share price of Access Bank on the Nigerian Stock Exchange as of the time the result was made available.
  • The estimated value of each unit of Access Bank shares in its book is currently N19.12, an appreciable improvement over the corresponding quarter’s estimate.
  • Confirming the under-priced status of Access Bank’s share price is the Price to Book Value estimate at below unity.
  • See below for details:
Investment/Valuation Ratios
Earnings Yield33.08%34.08%2.94


While valuing Access Bank’s shares, we choose a highly conservative method, seeking to present a very secure price to our users. Thus, we have valued each unit of Access Bank’s shares at N9.96, which is clearly below the Book Value, but above the current market price on the exchange. Hence, we Rated Access Bank a Buy.

We see Access Bank achieving higher valuation in years to come, after fully settling down from all the changes it went through owing to various acquisitions.