Access Holding Grew 2023 Third Quarter Profit By 82.8%

Access Holding Plc (ACCESSCORP) grew its profit after tax by 82.8% to N250.45 billion for the third quarter ended September 30, 2023. This accounts for income tax expenses of N43.97 billion.

Profit before tax was up by 99.9% to N294.42 billion.  The  unaudited financial statements show that the group recorded a 78.8% increase in Earnings Per Shares (EPS) to N6.92.

The earning expansion was driven by the gains across the group’s funded and non-funded income lines. Which stood at 83.3% and 63.7% respectively.

Notably, the holdco reported a standalone EPS growth of 135.6% to N3.18, which is above N1.35 that was recorded in 2022.

Other highlights of the group result shows that Interest income crossed the N1.00 trillion mark in the year’s first nine months, growing by 83.3% to N1.05 trillion.

Market watchers attribute this solid performance to the (1) elevated interest rates in the period and (2) the rise in the group’s earning assets, which was up by 41.5% to N14.55 trillion.

As a result, the group recorded higher income across all contributory lines, investment securities was up by 165.1% to N531.84 billion, loans and advances to customers was up by 30.7% to N458.41 billion, loans and advances to banks  went up by 202.7% to N37.48 billion, and cash and bank balances grew by 150.7%  to N20.74 billion.

The holdco’s interest expense spiked by 125.9% to N658.51 billion, mirroring the rising interest rates. Precisely, ACCESSCORP incurred higher costs across its funding base deposits from financial institutions was up by 266.1% to N232.45 billion, debt securities was up by 99.9% to N33.99 billion, deposits from customers grew by 92.3% to N338.17 billion, and interest-bearing borrowing went up by 54.6% to N53.07 billion in the period under consideration.

Accordingly, net interest income settled at N389.96 billion, translating to a 39.0%  growth. Given the N61.83 billion credit impairment charges taken in the period, the net interest income expanded by 44.2%  to N328.13 billion.

Further down, non-interest income rose by 63.7% to N485.65 billion, driven by the increased revenue generated from investment securities trading and fees and commission which neutered the lower gains from FX revaluation by 47.6% to N50.73 billion.

Consequently, the group’s operating income grew by 55.2%  to N813.78 billion. Elsewhere, operating expenses inched higher by 37.8% , primarily driven by an increase in personnel expenses, which was up by  30.9% to N117.63 billion, depreciation and amortization was up by 31.8% to N43.17 billion and regulatory charges from Nigeria Deposit Insurance Corporation  (NDIC) premium, which stood at 55.5% to N24.73 billion and Asset Management Corporation of Nigeria (AMCON) levy which stood at 30.5% to N68.81 billion.

Considering the group’s operating income which advanced faster than OPEX 37.8%, the cost-to-income ratio settled lower at 63.8% relative to 71.9% in the prior year.

Looking at the group’s financial performance, market analysts believe the group will maintain this positive momentum, particularly as the elevated interest rates remain a catalyst for earnings growth. In addition, the group’s non-banking verticals will continue to boost its non-funded income. .