Access Holdings Plc (ACCESSCORP) released its audited half year financials for the period ended June 30, 2023, reporting an EPS growth of 48.4% to N3.74/s which is above N2.52/s, that was reported same period in 2022.
The financial report shows that performance was supported by growth across its core (+63.4% y/y) and non-core (+53.0% y/y) income lines. The board has proposed an interim dividend of 30/ kobo which is above 20 kobo that was paid same period in 2022. This equates to a dividend yield of 1.9% based on the last closing price of N15.55/ as at September 25, 2023. .
The holdco recorded a 63.0% y/y increase in its interest income to N606.84 billion, driven majorly by the combined impact of (1) elevated yields in the fixed-income market and (2) the growth in the group’s earnings assets (+38.5% YTD to N14.24 trillion) in the period.
In nominal terms, the holdco recorded increased income from loans & advances to customers (+33.8% y/y to N318.53 billion), investment securities (+113.8% y/y to N259.33 billion), loans & advances to banks (+178.2% y/y to N22.51 billion) and cash and balances with banks (+33.9% y/y to N6.47 billion).
Interest expenses grew faster by 118.9% y/y to N382.60 billion, triggered by the higher cost of deposits from customers (+91.1% y/y to N207.57 billion) and financial institutions (+245.3% y/y to N115.55 billion), following the elevated interest rate in the environment amid the deteriorating CASA mix (H1-23: 60.7% | 2022FY: 62.6%).
Likewise, the group recorded higher costs on debt securities (+77.4% y/y to N20.06 billion) and interest-bearing borrowings (+67.5% y/y to N38.64 billion). After accounting for credit impairment charges (+0.8% y/y to N37.18 billion), net interest income (ex-LLE) settled higher by 16.4% y/y to N187.06 billion.
Furthermore, non-interest income (NII) expanded by 53.0% y/y to N296.48 billion, spurred by gains in fees and commission (+58.8% y/y to N88.03 billion) and FX revaluation (+362.4% y/y to NGN244.34 billion). The preceding was sufficient to offset the losses incurred on its trading books investment securities (N37.06 billion) and FX (N15.22 billion).
Elsewhere, operating expenses increased by 23.1% y/y to N315.94 billion, reflecting the heightened inflationary pressures and rise in regulatory costs. In terms of contributory items, the group recorded an increment in NDIC premium (+45.5% y/y to N16.16 billion), AMCON levy (+30.5% y/y to N68.81 billion), depreciation & amortization (+20.7% y/y to N26.18 billion) and personnel expenses (+11.8% y/y to N65.13 billion).
Following the faster operating income growth (+36.4% y/y) relative to OPEX, the cost-to-income ratio (ex-LLE) improved at 65.3% in H1-23 (vs 72.4% in H1-22). To sum up, profit before tax grew by 71.4% y/y to N167.60 billion. Meanwhile, following a surge in income tax expense (+255.3% y/y), profit after tax settled 52.6% y/y higher at N135.44 billion.