Access Bank H1 profit quickens as cost remains flat

Access Bank plc, Nigeria’s sixth largest lender by market value, first half profit quickens as costs remained flat despite the challenging operating environment, analysis of the financial statement shows.

For the first six month through June 2014, the bank’s net income rose by 7 percent to N22.58 billion from N21.09 billion in the same period of the corresponding year (HY) 2013.

Despite the regulatory induced costs combined with the CBN tightening policy, the bank was able to bolster the top-line level as gross earnings surged by 15.2 percent to N117.93 billion in HY 2014, compared with N102.23 billion as of HY 2013.

Furthermore, net interest income jumped by 28 percent to N48.74 billion in 2014, as against N37.90 billion in 2013, while maintaining a slight 3 percent increase in net interest expense to N48.74 billion.

Based on BusinessDay analysis, the bank’s cost-to-income ratio remained flat at 66 percent while total operating expenses increased slightly by 2 percent to N52.46 billion in HY 2014 from N51.67 billion.

It should be noted that the impressive performance is coming amid regulatory induced costs such as the Assets Management Commission (AMCON) charge of 0.5 percent of assets that has been bleeding profits of most Nigeria lenders.

The bank is aggressive about lending as loans-to-deposit ratio increased to 63.88 percent in HY 2014, as against 59.04 percent as of HY 2013.

Total loans and advances to customers jumped by 18 percent to N926.92 billion compared with N786.17 billion, as of HY 2013.

Deposit to customer also moved by 9 percent to N1.45 trillion in HY 2014, as against N1.33 trillion as of HY 2013.

In order to support small and medium enterprises (SMEs) owed by women, Access Bank introduced a wide range of lifestyle-oriented value benefits such as the ‘W’ initiatives.

According to the bank, part of the privileges for women and their families under the initiative include access to a comprehensive range of loan product and credit facilities; access to ‘W’ community with helpful advice on family and finance matters, home and family articles and details of special offers; access to a wide range of great discount, special offers and freebies on health, beauty and fitness.

Total assets were up 11 percent to N2.04 trillion in HY 2014, compared with N1.83 billion as of HY 2013.

Based on BusinessDay’s analyses, return on average equity (ROAE) was 15 percent while the return on average assets (ROAA) stood at 1.95 percent.

The bank’s share price closed at N9.78 on Monday on the floor of the Exchange, while market capitalisation N222.88 billion.

BALA AUGIE