Access Holdings Plc reported its highest gross earnings in nine (9) years, amounting to N906.9 billion in the nine-month period of 2022, up 30.85 percent from N693.13 billion in the corresponding period of 2021.
Further analysis of the nine months’ financial results shows that the bank generated the bulk of its total earnings from its corporate and investment banking operating segment, accounting for 40 percent of the total revenue generated.
The bank generated N360.34 billion from its corporate and investment banking operating segment, N250.96 billion from its commercial banking operating segment, N224.88 billion from its retail South banking operating segment, N69.51 billion from its retail North operating segment, and N1.20 billion from its asset management company operating segment.
Subsequently, profit grew by 12.40 percent to N137.01 billion in the nine-month period of 2022 from N121.89 billion in the nine-month period of 2021, the highest reported in nine (9) years, bringing the nine months 2022 annualised ROAE to 17.5 percent compared with 21.0 percent in the corresponding period of 2021.
Below are five (5) things to note about the nine months financial result;
Interest income and interest expense hit highest in 9 years
Access Holding’s nine months 2022 unaudited numbers showed a 21.48 percent year on year (y/y) growth in interest income driven by growth in interest income on net loans to customers which was up 11.1 percent in the nine-month period of 2022 compared to the December position.
Interest income increased to N571.98 billion in the nine-month period of 2022 from N470.86 billion in the corresponding period of 2021.
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Interest Expense also grew strongly, up 43.68 percent y/y and 31.8 percent quarter on quarter (q/q) due to increased growth in customer deposits, thereby resulting in a marginal 4.8 percent y/y growth in net interest income.
Interest expense for the nine-month period of 2022 stood at N291.95 billion from N203.19 billion in the nine-month period of 2021, while net interest income grew to N280.53 billion from N267.68 billion in the same period last year.
However, third quarter of 2022 compared with the second quarter of 2022, net interest income was down by 24.6 percent.
Overall, net interest margin was down to 4.6 percent in the nine-month period 2022 compared with 5.6 percent in the nine-month period of 2021.
Trading and FX gains/losses
Access Holdings generated N96.9 billion from the trading of financial instruments in the nine-month period of 2022. Further analysis on the financial results show that Access Holdings generated N159.37 billion from the disposal of fixed-income securities and N1.76 billion from the trading of fixed-income securities.
The group also reported a net gain on fair value hedge (hedging ineffectiveness) of N8.8 billion in nine months 2022 compared with a loss of N1.1 billion in nine months 2021.
Net foreign exchange gains generated by the bank, on the other hand, surged by 11.61 percent to N96.90 billion in the nine-month period of 2022 from N86.81 billion in the same period of 2021.
Operating expenses (OPEX)
Operating expenses grew by 32.10 percent to N344.18 billion in the nine-month period of 2022 from N260.55 billion in the corresponding period of 2022 on the back of the 98 percent and 55 percent growth in communication and security expenses.
Personnel expenses grew by 25 percent to N89.84 billion in the nine-month period of 2022 from N71.74 billion in the nine-month period of 2021.
The slower y/y growth in total operating income (up 24.2 percent y/y) compared with the growth in Opex led to a deterioration in the nine months of 2022 cost to income ratio (CIR ex provisions) to 65.3 percent compared with 62.6 percent in nine months of 2021.
Loans and advances to customers
Access Holdings grew its loan book by 23.20 percent to N4.62 trillion in the nine-month period of 2022 from N3.75 trillion in the nine-month period of 2021.
Its loans to customers grew on the back of a 23.75 percent increase in loans to corporate entities and other organisations which amounted to N4.22 trillion in the nine-month period of 2022, while loans to individuals amounted to N401 billion.
Deposits from customers
Deposits from customers increased by 31.46 percent to N8.19 trillion in the nine-month period of 2022 from N6.23 trillion in the same period of 2021.
According to data obtained from the bank’s nine months financial statement, term and demand deposits accounted for the highest, totaling N3.283 trillion and N3.282 trillion respectively during the period.
Savings deposits during the period amounted to N1.62 trillion.
