- We’re On Our Way To Being Africa’s Truly Global Bank- Roosevelt Ogbonna
The board of Access Holdings Plc (AccessCorp) last week submitted its unaudited financials to the Nigerian Exchange Limited, with numbers showing it is still Nigeria’s biggest bank by gross earnings income and asset base, even as its profit remains constrained owing to what the management explains is the result of its ongoing expansion and consolidation on its journey to being Africa’s financial powerhouse and most respected bank as outlined in its most recent five-year strategy. The group is currently expanding its foray into key financial hubs across the globe, the latest being Hong Kong.
Addressing senior editors of national dailies last week during a parley with the group’s management team led by Ms. Bolaji Agbede, the Acting Group Managing Director at its Lagos headquarters, Roosevelt Ogbonna, Managing Director/Chief Executive explained that Access Holdings has stationed itself “in the largest trading markets across Africa,” ready to promote intra-African trade.
Access Bank, he said, is already “the largest correspondent banking group in the UK, and expects to be in the U.S. by Q4 2025.
“We want to be Africa’s Africa’s trading bank,” as part of the overarching plan to become Africa’s truly global bank, he stressed.
At the end of the nine months, Access Holdings Plc reported gross earnings income or total revenue of N3.418tr, rising by N1.824tr or 191.42% from N1.593tr in the corresponding nine months of last year. A breakdown of the result showed that corporate and investment banking contributed the lion’s share of earnings, accounting for N1.371tr or 40.13%. This was 113.92% better than last year’s N641.215bn; followed by commercial banking with N787.661bn, up from N416.008bn; while retail banking south recorded N680.01bn, compared to N355.032bn. Retail banking (North) posted N530.773bn, a significant rise from N171.2bn; the group’s holding segment posted N142.129bn, compared to N68.231bn; Pension Fund Administration business recorded N26.783bn from N8.569bn; ahead of payment segment, N6.802bn, from N923m; and digital lending N2.127bn.
By geography, Nigeria remains the group’s business operating unit, accounting for N2.477tr, or 72.48% of the gross earnings, compared to N1.248tr or 78.36% of the previous year’s total; ahead of revenue from the rest of Africa, amounting to N752.911bn, up from N213.799bn; while Europe followed with N381.876bn, up from N130.994bn.
Of the total revenue for the period, interest income remained the most pronounced at N2.155tr, after improving by N1.202tr or 126.11% from N953.374bn last year; while interest income on financial assets grew by N154.809bn or 154.81% from N95.089bn to N242.296bn. This was buoyed by the N1.128tr, up from N458.409bn from loans and advances to customers. Interest expense closed the period at N1.553tr from N652.509bn, representing a growth of N894.591bn or 135.85%, lifted by N707.986bn, compared to N232.447bn expense on deposits from financial institution; and N646.61bn paid on customer deposit from N338.166bn. This resulted in net interest income of N699.892bn, an increase of N454,.886bn or 138.63% over the previous N328.13bn.
Net impairment charge on financial assets increased by N83.124bn or 134.45% to N144.949bn from N61.825bn, of which allowance for impairment on loans and advance to customers increased from N50.027bn to N76.153bn; just as allowance on impairment on financial assets in other assets leaped to N35.904bn from N11.723bn. Net interest income after impairment charge, therefore stood at N699.892bn from the previous N328.13bn.
Fee and commission income rose by N193.344bn or 92.87% from N208.182bn to 401.526bn, buoyed by the N151.086bn credit related fees and commission from N83.634bn; commission on other financial services grew from N17.89bn to N49.719bn; commission on foreign currency denominated transactions channels and other e-business income grew to N121.13bn from N70.35bn; while account maintenance charge and handling commission increased from N21.848bn to N46.844bn; among others. Fee and commission expense could only increase by N12bn or 20.13% from N59.628bn in the first nine months of 2023 to N71.628bn, boosted by the N58.338bn e-banking expense, up from N50.564bn; while bank and electronic transfer chrges closed the period at N13.29bn from N9.064bn. Net fee and commission income, therefore, appreciated by N181.345bn or 122.07% to N329.899bn from N138.554bn.
Fair value and foreign exchange gain for the period soared to N548.377bn from N314.601bn, representing a growth of N122.776bn or 74.31%; Other operating income for the period rose to N66.801bn from N22.109bn, driven primarily by the N28.679bn recovered bad debt during the period, up from N6.937bn; while income from other investments soared from N3.889bn in the first 9 months of last year to N23.425bn.
Personnel expenses grew from N117.625bn to N282.181bn, with wages and salaries accounting for N267.988bn, compared to N111.799bn. Depreciation increased to N53.312bn from N30.535bn; bargain purchase from acquisition stood at N3.301bn from nil in the previous nine months; amortisation increased to N21.108bn from N12.631bn; Other operating expense grew by N375.402bn or 104.47% from N358.57bn to N733.972bn, driven by administrative expenses of N171.941bn from N43.351bn; ahead of the N131.424bn expenses for IT and e-business expenses from N22.383bn; while Asset Management Corporation of Nigeria (AMCON) surcharge amounting to N112.223bn, up from N68.805bn; among others.
Profit before tax rose from N294.416b to N58.178bn; income tax expenses at N100.432bn, compared to the previous N43.972bn; resulted in Profit After Tax of N457.746bn, after growing by N207.302bn or 82.77% from N250.444bn. Earnings Per Share for the period, therefore improved from N6.92 each to N12.40 per share.
On the balance sheet, Total assets for the period improved by N14.4tr or 53.96% from N26.688tr at the end of December last year to N41.089tr year-to-date, boosted by customer loans and advances which rose from N8.037tr to N11.861tr, an increase of N3.824tr or 47.68%; followed by investment securities which improved from N5.342tr to N10.237tr; among others.
Total liabilities for the period grew to N37.788tr from N24.503tr, representing a growth of N13.285tr or 54.22%, boosted by the N22.28tr customer deposits, which increased by N6.957tr or 45.41% from N15.322tr to N22.28tr.
Asked why the group’s net profit growth is not commensurate with the earnings, Ogbonna explained that AccessCorp is currently transiting from its investing strategy to consolidating phase spanning 2023 to 2025 half-year. It is within this period, he noted, investments by the corporation would start yielding the expected returns, and investors should expect juicier rewards for years of loyalty to the brand.
Already, Ogbonna said, the fruits of AccessCorp’s various five-yearly strategies are evident with the group competing for size and space among Africa’s biggest banking powerhouses and on its way to “being Africa’s truly global bank.”