Access Bank Nigeria Plc’s first quarter interest income was up 20.50 percent as the lender continues utilise shareholders resources in generating higher profit amid tough and unpredictable macroeconomic environment.
Interest income and similar charges increased to N95.59 billion in March 2018 as against N79.33 billion as at March 2017, driven by a 28.66 percent rise in interest on loans and advances to customers, which was N74.20 billion in the period under review.
Access Bank’s top line or revenue also got a boost from non-interest revenue.
Fees and commission income grew by 34.61 percent to N15.71 billion in the period under review from N11.67 billion the previous year.
“We expect stronger loan growth in the course of the year to boost growth in fee and commission income,” said Gloria Fadipe, equity research analyst at CSL Stock Broker Limited, in a note to clients.
Net gains on investment securities surged by 400 percent to N27.67 billion in March 2018 as against N5.54 billion the previous.
Access Bank recorded an annualised Return on Average Equity (ROAE) of 18.2 percent as at March 2018, which is significantly ahead of 12.80 percent of 10 analysts surveyed by BusinessDay.
However, the Nigerian lender’s net income remained flat at N22.11 billion, due to a foreign exchange revaluation loss of N6.82 billion in the period under review.
Access Bank’s interest expense was up 39.21 percent to N33.37 billion as at March 2018, from N25.58 billion the previous year.
Similarly, deposit from customers spiked by 30.45 percent to N33.37 billion in the period under review as cost of funds increased to 5.80 percent in March 2018 from 5.10 percent the previous year.
The bank saw a rise in funding costs last year, according to analysts at CSL
“This, according to management, was as a result of the high interest rate environment compounded by the issuance of international debt securities ($300m senior unsecured notes in October 2016 with a coupon rate of 10.5 percent took out the $350m senior notes which matured in July 2017, with a lower coupon rate of 7.5 percent) and a commercial paper to provide a liquidity buffer for the bank,” said analysts at CSL.
Access Bank’s Non-Performing Loans (NPLs) increased to 4.7 percent in the period under review, from 2.3 percent the previous year.
The bank had taken 38 percent provision on its 9Mobile exposure and does not expect more impairment to be taken in 2018e.
Net impairment charge was up 55.48 percent to N4.96 billion in March 2018 from N3.19 billion as at March 2017.
Analysts at CSL have placed a ‘Buy’ rating on Access Bank’s stocks with a target price of N15.71/s.
We have a ‘Buy’ rating on Access Bank with a target price of N15.71/s.
Access Bank’s share price closed at N11.15 as of 2:00 pm in Lagos on Wednesday April 25, valuing it at N328.33 billion.
BALA AUGIE
