If you are still in doubt as to why the management of Access Bank went into a merger with the defunct Diamond Bank, you may have to check the bank’s latest financial results for the period ended September 30, 2019 to see justifications for their move. Across all metrics, Access Bank showed significant improvements in spite of the obvious challenging environment.
Net interest income at the end of the third quarter rose by 37 percent from N254.9 billion to N349.2 billion. It made N66.9 billion as fee and commission income in Q3 2019, which was 54 percent higher than N43.5 billion the bank realised same period in 2018.
Net fee and commission income in third quarter of 2019 was better than the corresponding period in 2018 as it rose from N37.5 billion to N56.01 billion, thus amounting to an increase of 50 percent.
Profit after tax(PAT) at N90.7 billion for this year’s third quarter amounted to an increase of 44 percent over N62.9 billion in the corresponding period in 2018.
In terms of contribution, the corporate and investment banking segment of its business generated 50 percent of the bank’s profit before tax. At N51.94 billion at the end of the third quarter of 2019, the corporate and investment banking segment of Access Bank grew by 25 percent to account for 25 percent of the bank’s profit before tax. Commercial banking segment profit before tax rose by 43 percent year on year to N28.35 billion as against N19.8 billion last year’s September to account for 27 percent of the profit.
Business banking profit before tax rose by 134 percent from N3.76 billion last year September to N8.79 billion in Q3 2019 and thus accounted for 9 percent of the profit before tax. Personal banking services increased by 177 percent to N14.01 billion during the period, up from N5.06 billion the bank recorded last year September, and thus contributed 14 percent to the overall profit before tax. Access Bank’s share price closed last Friday at N7.30 having gained 7.4 percent year to date.
Stanbic IBTC’s net interest income remained flat at the end of the period as against N58.44 billion it made by September 2018, Stanbic IBTC announced N58.67 billion net interest income for the period ended September 30, 2019. Net fee and commission income also remained flat at N53.37 billion in September 2019 as against N52.9 billion at the end of the third quarter of 2018.
However, profit after tax stood at N55.6 billion, representing a decline of 7 percent when compared with N59.7 billion the bank realised same period in 2018.
Stanbic IBTC ended the third quarter with a capital adequacy ratio(CAR) of 16.2 percent which is slightly higher than the regulatory 15 percent for tier one banks. Notwithstanding, CAR is not the only requirement that qualifies a bank for tier one, according to industry experts.
“CAR is not the only requirement that qualifies a bank for the tier one status, as there are other conditions stipulated by BASEL II which the Central Bank of Nigeria (CBN) looks out for. Such conditions include the size, assets, among others which the bank might not have fulfilled”, an industry expert, who did not want his name in print, said.
Its share price closed at N37 per share, representing 22.8 percent year to date decline.
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