Recently, Access Holdings Plc released its audited Consolidated and Separate Financial Statements for the year ended December 31, 2023. In the year under review, the Group recorded a robust growth in it Profits Before Tax (PBT), posting a healthy N729 billion, representing 335percent year-on-year (YoY) increase from 2022.
Access Holdings Plc operates through a network of more than 700 branches and service outlets, spanning three continents, 21 countries and serving over 60 million customers.
The Group has sustained growth across key indices and ensured financial stability and sustainability leveraging its strong risk management practices.
This is evident in Access Holdings’ low non-performing loan (NPL) ratio of 2.78 percent in 2023, and the group’s deliberate de-risking of FX-related exposure and the sustainable growth of risk assets.
Full year 2023 scorecard shows remarkable growth across key indices
Access Holdings’ gross earnings also surged by 87 percent YoY to N2.59 trillion, up from N1.38 trillion in 2022. This remarkable growth was primarily driven by a 100percent increase in interest income and a 67.9percent growth in non-interest income.
Further look at the full year 2023 scorecard shows the Group’s Net Interest Income (NII) also demonstrated strong performance, soaring by 93.5percent YoY to N695.4 billion, compared to N359.6 billion in the previous year.
The yield on earning assets also rose remarkably from 9.2percent in 2022 to 12.8percent. Access Holdings’ loans and advances expanded by 60.5percent YoY to N8.9 trillion, accompanied by an improvement in the Non-Performing Loan (NPL) ratio, which decreased to 2.8percent from 3.2percent in 2022.
The Group closed the year with N2.18 trillion in shareholders’ Funds, marking a significant 77.5percent growth from N1.23 trillion in FY 2022. The Group has proposed a final dividend of N1.80 kobo per share for the 2023 financial year, bringing the total dividend payment to N2.10 kobo per share with a total value of N74.6 billion.
Access Holdings’ regulatory ratios strengthened in 2023 as Capital Adequacy Ratios (CAR) for the Group, and its flagship subsidiary, Access Bank, stood at 19.01percent and 21.09percent, respectively. The Liquidity Ratio remained robust at 51.8percent, well above the regulatory threshold.
Other subsidiaries posted strong results
Other subsidiaries of Access Holdings Plc also posted strong results. For instance, Access Pensions Limited recorded a 75percent growth in gross revenues, amounting to N12.3 billion, while Hydrogen Payment services posted an operating income of N2.1 billion and a PBT of N161 million.
Access Holdings Plc acquired Megatech Insurance Brokers Limited (now known as Access Insurance Brokers Limited) and successfully completed a $300million capital injection into Access Banking Group, which acquired several entities including Finibanco Angola S.A., and select Standard Chartered Bank operations in Africa. Access Bank’s UK subsidiary also opened a branch in Paris and received regulatory approval to commence operations in Hong Kong.
Commencing in the second half of 2024, the Group’s Africa and international expansion strategy will enter the consolidation and efficiency phase, aligning with the institution’s five-year plan to accelerate the attainment of its 2027 strategic objectives.
Stakeholders speaks
“The Group’s strong performance in 2023 reflects our commitment to delivering value to our shareholders and stakeholders amidst challenging operating environments. The significant growth in our earnings is a testament to the resilience, strategic focus, and efficiency of our team, and reflects the diversity of our offering across banking, pension, insurance, and payments driven by robust risk management, best-in-class corporate governance, and cutting-edge technology.
“As we look ahead, we remain committed to driving sustainable growth, consolidating our footprint, and accelerating the attainment of our 2027 strategic objectives,” said Bolaji Agbede, acting Group Chief Executive Officer, Access Holdings Plc while commenting on the performance.
Roosevelt Ogbonna, Managing Director/CEO, Access Bank in his remark on the bank’s accomplishments said: “As we reflect on the results of 2023, characterised by robust growth, strategic acquisitions, and expansion into key trade hubs, I am excited about the prospects for Access Bank. Our relentless focus on customer-centricity, digital innovation, and operational excellence has positioned us strongly to capitalise on emerging opportunities.
“As we enter the consolidation and efficiency phase of our Africa and international expansion strategy, we remain committed to driving sustainable growth, enhancing shareholder value, and delivering exceptional banking experiences to our customers across Africa and beyond.”
Also, Aigboje Aig-Imoukhuede, chairman, Access Holdings while reiterating his confidence in the organisation’s resilience said, “As we navigate this transformative period, we remain confident in the leadership of the Group to continue this upward trend and set the standard for financial service groups in the continent. Access Holdings has a rich history of excellence, and we will continue to deliver unparalleled value to our stakeholders”.
Here’s what analysts said …
“Earnings showed solid growth on both revenue streams: interest income (+99.9percent to N1.7 trillion) and Non-interest Revenue (+71.3percent to N869.8 billion). Consequently, the gross earnings grew by 89.1percent to N2.5 trillion.
“On specifics, the growth in interest income reflected the combined impact of higher asset yields (circa 19percent) and an expanded interest-earning asset base (+74.5percent). Overall, the result translated to an earnings per share (EPS) of N17.24 (versus N4.46 in FY’2022), with profitability ratios showing marked improvements,” said CardinalStone Research analysts in their March 27 commentary where they also noted that Access Holdings Plc asset quality remained healthy as NPL stayed relatively flat.
Also, Olumide Sole, SSA banks research analyst at Lagos-based Vetiva Research in an April 2 note urged investors to buy shares of Access Holdings Plc considering Vetiva’s Target Price (TP) of N31.30 which shows upside potential as against N22.60 it closed as at Friday April 5.
“Following our revised earnings projection, we have increased our FY’2024 PBT and PAT projections to N1trillion and N878billion respectively, giving us and EPS figure of N24.71. Thus, we raise our 12-month target price to N31.30 and maintain our BUY rating on the stock. The bank’s share price has risen 5.62 percent and it is currently trading at a P/B of 0.55x below Tier-1 peer average of 0.8x,” the analyst at Vetiva said.
Blessing Ishola, analyst at Coronation Research in a March 28 first look at Access Holding full year 2023 results noted that the non-performing loan (NPL) ratio declined is a positive trend in asset quality over the last four years and below the 5percent regulatory limit.
“The total capital adequacy ratio ended the period at 19percent, higher than the minimum regulatory requirement of 15percent,” said the Coronation research analyst who also noted that Access Holdings FY 2023 results beat expectations.
The analyst asked investors to buy the stock saying that their Price Target (PT) is N29.93, representing remarkable upside potential.
“Overall, the results impressed the market, beating both our view and those of other analysts. The market reacted positively to the results…which in our opinion is due to the increase in dividends.
“As part of the firm’s growth strategy, it has announced its proposed acquisition of the National Bank of Kenya and the acquisition of an insurance company Megatech Insurance Brokers, and others. We expect that this diversification will continue to further strengthen the group,” the Coronation research analyst further said.
