Access Holdings Plc, at the weekend presented its audited earnings report for the half-year ended June 30, 2023, with double digits growth in gross earnings, and profit for the period. Profit before and after tax could have been significantly better, but for the N207.796bn or 118.87% growth in interest expense during the period, translating to an Earnings Per Share of N3.74, compared to the previous N2.52, from which the directors only to able to propose an interim dividend of 30 kobo just like last financial year. The dividend will be paid electronically on October 19 to shareholders who’s names appeared on the register of members as of the close of business on Thursday, October 5, 2023.
Gross earnings rose 58.89% to N940.311bn in the first half of 2023, from N591.803bn in the preceding half-year. A breakdown of the figure by operating segments showed that the corporate & investment banking segment contributed the most, after raking in N469.544bn, up from N266.755bn; commercial banking, N258.921bn, compared to N159.86bn; and N206.796bn from retail banking, compared to N48.538bn.
Interest income on financial assets fell from N29.774bn to N10.701bn, even as it remained the primary driver of interest income at N596.136bn from N342.53bn in the same period of 2022; boosted by the N315.186bn also from corporate & investment banking; while commercial banking raked in N157.216bn; and N134.706bn from retail banking. Interest expense however grew by N207.796bn, from N174.802bn to N382.598bn; leaving net interest income of N224.239bn, compared to previous half-year’s N197.502bn. Corporate banking accounted for N178.117bn of interest expense, ahead of N71.466bn by commercial banking; while the N96.857bn expense from retail banking (south), threw net interest income from that segment into negative; while the north recorded N28.281bn in expense.
A further breakdown of the interest income by geography showed that Nigeria remained the group’s honeypot, contributing N482.949bn or 79.58%, compared to N283.547bn or 75.47%; followed by the rest of Africa with N81.653bn, or 31.45%, from N70.542bn or 19.72%.
Net impairment charge on financial assets rose marginally from N36.863bn to N37.175bn, of which N33.413bn resulted from allowances for impairment on customer loans and advances, compared to N30.26bn; resulting in net interest income after impairment charges of N187.064bn, up from N160.63bn.
Fee and commission income for the half-year rose to N125.021bn from N81.1bn, driven by credited related fees and commissions which rose from N10.501bn to N49.265bn; while channels and other e-business income increased to N43.948bn from N38.861bn. Fee and commission epense grew from N25.662bn to N36.995bn, helped by e-banking epense which rose from N21.656bn to N31,428bn; just as bank and electronic transfer charges rose to N5.573bn from N4.007bn; following which net fee and commission income grew to N187.064bn from N160.639bn.
Fair value and foreign exchange gain for the period improved to N192.047bn from N128.253bn; other operating income improved to N16.022bn from N10.029bn, helped by the N5.318bn recovered bad debt, up from N1.433bn; personnel expenses grew from N58.274bn to N65.126bn; depreciation from N14.948bn to N18.595bn; while amortization and impairment increased to N18.595bn from N14.948bn. Other operating expenses jumped to N224.638bn from N176.71bn. Profit before tax for the period improved to N167.601bn from N97.791bn; income tax soared to N32.161bn from N9.052bn; while net profit for the period rose to N135.441bn from N88.887bn. Details of the net profit showed that corporate banking contributed N80.058bn from the previous N43.563bn; followed from afar by retail banking (south), N31.441bn; retail banking (north), N21.501bn, compared N8.119bn; commercial banking, 13.587bn, down from N30.711bn previously.
Unrealised foreign currency transaction differences stood at a significant N339.999bn, compared to prior half year’s N31.511bn unrealized foreign currency transaction loss; while change in fair value of FVOCI debt financial instruments rose to N88.249bn from the N7.559bn loss a year earlier. Other comprehensive gain, net of related tax effects amounted to N421.343bn, compared to the previous N39.95bn loss; leaving total comprehensive gain for the period of N556.783bn, up from just N48.789bn.
The balance sheet also saw significant growth from N14.998tr at the end of December last year, to N20.791bn; led by the customer loans and advances of N6.709tr, up from N5.1tr. Liabilities stood at N19.121tr from N13.767tr, of which customer deposits grew to N12.508tr from N9.251tr.