• Thursday, April 18, 2024
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Five highlights from Access Holdings’ full-year report

Five highlights from Access Holdings’ full-year report

The profit of Access Holdings Plc, a multinational financial services group, rose four-fold last year, BusinessDay analysis of the group’s latest audited financial statements show.

The group’s after-tax profit grew by 307 percent to N619.3 billion from N152.2 billion in 2022. Its income tax expense surged to N109.7 billion from N14.8 billion.

“Profitability spiked as the group’s profit before tax increased by 334.8 percent year-on-year to N729.00 billion. Likewise, after-tax profit settled 305 percent year-on-year higher at N619.32 billion, after accounting for a rise in income tax expense (+642.2 percent year-on-year) in the period,” analysts at Cordros Securities said in a recent note.

They said looking ahead into 2024 estimates, the firm anticipates a sustained uptrend in funded and non-funded income given the still elevated interest rate environment and depreciation of the local currency so far in the year.

Another recent note by CSL Research said sturdy operating performance and revaluation gains supported Access Bank’s profit growth.

“Access Holding’s full year 2023 audited numbers showed a 99.9 percent year-on-year growth in interest income (18.5 percent higher than our forecast) driven by growth in both interest income on net loans and yields on investment securities due to a higher yield environment and growth in earnings assets.

“Yield on earning assets increased to 12.8 percent in 2023 from 9.2 percent in 2022. Net Loans grew 57.6 percent in December 2023 compared with December 2022 inclusive of the impact of devaluation on foreign currency loans,” they added.

CSL noted that interest expense also grew strongly reflecting the increasing interest rate environment, up 105 percent year-on-year, driven mainly by strong growth in interest expense on deposits from financial institutions (up 170.6 percent year-on-year) and deposits from customers (up 85.2 percent year-on-year).

“Cost of funds closed in 2023 at 5.4 percent compared with 4.1 percent in 2022. Overall, net interest income grew strongly, up 93.4 percent year-on-year bringing the net interest margin to 5.4 percent from 4.0 percent in 2022.”

Here are five highlights from the group’s full-year result

After-tax profit surged 307% in one year

The group’s after-tax profit grew by 307 percent to N619.3 billion in 2023 from N152.2 billion in 2022.

Coronation Research analysts said in a report that Access Holdings’ full-year 2023 results beat expectations.

Earnings for the period were primarily driven by expansion in non-interest income, particularly trading revenues (fair value gains on financial instruments) and fees and commissions, according to analysts at Cordros Securities.

“Overall, the results impressed the market, beating both our view and those of other analysts. The market reacted positively to the results yesterday which in our opinion is due to the increase in dividends,’’ they said.

Net interest income rose to N695.4bn

Net interest income grew to N695.4 billion in 2023 from N359.6 billion in 2022 while net impairment charge on financial assets dipped to N139.5 billion from N197.8 billion.

The group’s net interest income after impairment charges surged to N555.8 billion from N161.8 billion.

Loans and advances hit N747.2bn

The group’s loans and advances to customers rose to N747.2 billion last year from N461.2 billion in 2022 while loans and advances to banks grew to N79.6 billion from N20 billion.

Deposits from customers rose by 86%

The group’s deposits from customers rose to N505.6 billion in 2023 from N273.1 billion in 2022. Deposits from financial institutions grew to N320.8 billion from N118.5 billion.

“Customer deposits were up 65.2 percent for 2023 compared with the December 2022 position also inclusive of the impact of devaluation on foreign currency deposits,” an analyst at CSL Research said.

Net fee and commission income grew to N207.8bn

The group’s net fee and commission income increased to N207.8 billion in 2023 from N145.7 billion in 2022. Fee and commission income grew to N277.5 billion from N197.6 billion while fee and commission expense rose to N69.7 billion from N51.9 billion.

“The strong growth in fee and commission income was driven mainly by a significant jump in channels and other e-business income (up 70.3 percent year-on-year) and commission on other financial services (up 157.8 percent year-on-year). Credit-related fees and commissions also grew moderately (up 10.9 percent y/y),” the CSL Research report said.

Basic earnings per share more than tripled to N17.23

Access Holdings’ basic earnings per share grew to N17.23 in 2023 from N4.46 in 2022.