ACCESS BANK RECORDS N74.1B PROFIT
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| Mr. Herbert Wigwe,Group Managing Director/CEO, Access Bank Plc. |
Access Bank has released
its first earnings report after its merger with Diamond Bank, showing 62 per
cent growth in profit before tax in the first six months of this year. The
board has approved payment of N8.89 billion as interim dividend to
shareholders, equivalent 25kobo per share.
Key extracts of the
audited report and accounts for the six-month report ended June 30, 2019 showed
that gross earnings rose by 28 per cent to N324.4 billion in first half 2019
compared with N253.0 billion recorded in corresponding period of last year. The
top-line growth was driven by 46 per cent increase in interest income on the
back of continued growth in the bank’s core business and 22 per cent growth in
non-interest income underlined by strong recoveries.
The
Nation reports that the operating income grew by 34 per cent
to N202.3 billion in first half 2019 as against N151.4 billion in comparable
period of 2018. Profit before Tax rose from N45.8 billion to N74.1 billion,
representing an increase of 62 per cent. Profit after tax rose correspondingly
from N39.6 billion in first half of last year to N63.01 billion in first half
of the year.
The balance sheet size
expanded by 31 per cent as total assets increased to N6.48 trillion by June,
this year compared with N4.95 trillion reported by December 2018. Capital
Adequacy Ratio (CAR) stood at 20.8 per cent, considerably above the minimum
regulatory requirement.
Group Managing Director,
Access Bank Plc, Mr. Herbert Wigwe said the bank’s performance in the first
half of the year reflected its sustainable business model and effective
execution as the bank made strong gains towards the achievement of its
strategic goals.
He said the bank’s focus
on retail gained momentum during the period as continued investments in its
channels platform resulted in a 29 per cent contribution to gross fee and
commission income, which rose by 92 per cent when compared with the previous
period.
According to him, the
strong retail contribution demonstrates the effectiveness of the bank’s
continued drive around low-cost deposits, on the back of an innovative digital
platform.
He pointed out that asset quality improved as earlier indicated to 6.4 per cent on the bank of a robust risk management approach, assuring that the improvement in asset quality is expected to trend into the future as the bank strives to hit and surpass the standard it had built in the industry prior to the merger.
He added that the bank’s
liquidity ratio improved year-on-year to 49.7 per cent, reflecting deliberate steps
to optimise balance sheet in order to ensure the group’s liquidity position
remains robust.
“Going into the second
half of the year, our focus is on consolidating momentum and driving access to
financial inclusion through our various agency initiatives. Additionally, we
will remain disciplined in our efforts to deliver enhanced shareholder value,
as we continue to realise the synergies from our newly expanded franchise,”
Wigwe said.
Analysts at Cordros
Securities described the results as impressive pointing out that the bank
recorded strong growth in both gross earnings and profitability. The strong
performance was underpinned by funded income growth, with non-funded income
underperforming the prior year.
According to analysts, the
macro-prudential ratios for the bank remained strong, with the exception of
non-performing loan ratio of 6.4 per cent, which remains above the statutory
level but has trended downward from the 10.0 per cent recorded in first quarter
of the year.
Analysts said while the
bank has significant headroom to drive growth given the macro-prudential
ratios, they expect more focus on the remediation to bring non-performing loan
ratios downward.
“So far so good, it seems
for the bank, as the numbers seem to show no signs, as of yet, of synergistic
issues. The performance is strong, and the improvement in non-performing loans
is positive. However, we seek clarity as to the driver of the moderation to
gauge the sustainability. Nonetheless, at the current run-rate, the bank is on
course to record a strong full year 2019 performance.
The first half report
built on a strong first quarter. Key extracts for the three-month period ended
March 31, 2019 showed that gross earnings rose by 16.5 per cent to N160.12
billion in first quarter 2019 as against N137.54 billion in first quarter 2018.
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