The board of Access Holding Company Plc, on Saturday posted its audited result for the half-year ended June 30, 2024, on the Nigerian Exchange Limited platform, with highlights showing that gross earnings grew at a faster pace than profit. The directors offered an interim dividend of 45 kobo per share from the basic earnings per share of N7.61 each, up from the previous N3.74 per share of which 30 kobo each was distributed as dividend, in what the group said is in its bid to conserve capital.
According to the result, gross earnings income for the period grew by N1.255trillion or 133.51% to N2.195tr, from the previous half-year’s N940.311bn. The Nigerian bank accounted for a significant N1.637tr, compared to the previous N753.406bn, ahead of the N494.806bn, up from the previous N117.842bn earned from the rest of Africa; and N233.806bn from Europe, rising from N68.941bn in the same period of 2023.
Of this, interest income grew from N596.136bn to N1.288tr, of which N984.851bn was from the Nigerian business, as against the previous N482.949bn; N303.37bn was from the Africa, against N81.653bn; and N236.112bn from Europe, which in the 2023 half-year accounted for N59.723bn. Interest income on financial assets at face value jumped from N10.701bn to N184.106bn.
A further breakdown of the interest income component of the group’s revenue showed that income from loans and advances to customers yielded N691.859bn from N318.526bn; while that from banks pooled N86.683bn, up from N22.508bn, among others.
Interest expense took an almost triple leap from N382.598bn in the corresponding period of last year to N958.732bn, buoyed by the N768.606bn incurred by the Nigerian operations, N145.451bn by Access Africa and N96.885bn from Europe. This resulted in net interest income of N513.391bn from N224.239bn. Interest expense was mainly the N419.226bn paid on deposits from financial institutions which rose from N115.552bn; while another N411.215bn was paid on customer deposits as against the previous N207.569bn.
Net impairment charge on financial assets grew from N37.476bn to N122.738bn, of which provisions form impairment on customer loans and advances rose from N33.413bn to N61.423bn; following which net interest income after impairment charges increased from N187.064bn to N390.653bn.
Fee and commission income for the period increased to N250.953bn from N125.021bn, lifted by the N91.743bn earned from credit related fees and commissions, from N49.265bn; ahead of the N73.814bn from commission on foreign currency denominated transactions, channels and other e-business income, from N43.948bn; and the N38.165bn commission on other financial services, which increased from N10.386bn.
Fee and commission expense, on the other hand grew to N46.244bn from N36.995bn, mainly the N37.057bn e-banking expense which rose from N31.423bn; while bank and electronic transfer charges cost N9.187bn, from N5.573bn.
This left a net fee and commission income at N204.709bn, up from N88.026bn.
Fair value and foreign exchange gain for the period ballooned from N192.047bn to N406.911bn; other operating income also increased to N61.968bn from N16.622bn, of which N29.037bn came from bad debt recovered, from N5.318bn. Personnel expenses more than doubled from N65.126bn to N158.847bn; depreciation stood at N34.106bn from N18.595bn. Bargain purchase from acquisition stood at N3.301bn; amortisation increased to N512.377bn from N224.638bn. These resulted in profit before tax of N348.922bn, representing an increase of N181.321bn or 108.18%, from N167.601bn in the preceding half-year. Income tax expense of N67.595bn for the period, up from N32.161bn resulted in Profit After Tax of N281.327bn, up by N145.886bn or 107.71%, from the previous N135.441bn.
The group also posted a significant growth in its balance sheet, with total asset at N36.596tr in the first half of 2024, from N26.688tr at the end of December 2023, boosted by the N10.835tr in customer loans and advances, which grew from N8.037tr at the end of 2024; just as investment securities amounted to N10.088tr from N5.342tr. Total liabilities improved from N24.503tr to N33.759tr, of which customer deposits soared from N15.322tr to N20.112tr; while deposits from other financial institutions improved to N7.24tr from N4.437tr.
A statement by the group on Saturday noted that “Cost-to-income ratio (CIR) remained relatively flat at 60.4% in half year 2024 despite double digit growth in inflation and devaluation in the same period.
“Cost to income was moderated as revenue outpaced operating expenses,” just as non-performing loan (NPL) ratio closed at 2.72% in half year 2024, below the regulatory threshold of 5%, helped by its proactive risk management approach.
Also, Capital Adequacy Ratio (CAR) remained strong at 19.8%, while loan-to-funding and liquidity ratios also improved to 63.9% and 57.2%, respectively, while all prudential ratios exceeded regulatory requirements, underscoring our ability to maintain a robust and liquid balance sheet.
“The increase in operating expenses was primarily from ongoing IT upgrade and integration, double-digit growth in AMCON levy and NDIC premium which increased by 63.1% and 37%, respectively, and will normalise in the second half of the year, inflation-related cost-of-living adjustments, higher energy expenses, and the currency conversion impact of subsidiaries’ operating costs,” the group explained.
The decision to declare a 45 kobo dividend, the statement noted is to maximise value for shareholders, representing a 50% increase in dividend payout.
Despite the challenging operating environment and tight monetary policy stance, it explained that the flagship Access Banking Group recorded strong year-on-year growth across all performance metrics, even as the banking subsidiaries contributed 55% to the group’s PBT, demonstrating what it said is “the significant impact of their operations and growing importance in driving overall profitability. Year-on-year, their PBT performance grew by 218% from N63.3bn to N201.7bn.
It also announced that as part of its “ongoing strategic expansion beyond Nigeria, we have successfully completed the full integration of the merged entities in Zambia and Tanzania operations.
“These developments not only enhance our presence in key markets but also create significant value by expanding our customer base, strengthening cross-border banking capabilities, and fostering increased operational efficiency across our subsidiaries,” it stressed.
Access Holdings expressed confidence in its ability to surpass the growth momentum achieved in the first half of the year, while looking ahead to the second half with strategic priorities remaining focused on scaling non-banking segments, expanding its digital footprint, and solidifying its presence in high-growth African and international markets.
These, he continued, “are geared towards accelerating revenue diversification and ensuring long-term sustainable value creation for our shareholders.
“Furthermore, we are fast-tracking the completion of our technology infrastructure integration and upgrades, which will significantly enhance operational efficiency across the group. This technology transformation will strengthen our digital capabilities, allowing us to deliver superior services to our customers, drive operational synergies, and optimise cost.
“Our strategic focus on non-banking segments, digital expansion, and geographic diversification will continue to create lasting value for shareholders, positioning the group to capitalise on emerging opportunities and sustain growth in the long term,” the statement further added.
