Tier-1 lender, Access Bank kick-started the year on a solid note after recording an 86 percent surge in its profit after tax (PAT) in Q1 2019 ended 31st March 2019, making it the first deposit money bank on the Nigerian Stock Exchange (NSE) to release its first-quarter report for the year.
According to Access Bank, the financial report reflects the result of the combined entity after the merger with Diamond Bank plc which was concluded in the first quarter of 2019.
The bank’s profit after tax jumped to N41.14 billion in Q1 2019, as against N22.11 billion recorded in the corresponding period of 2018.
Key indices in the income statement showed a 16 percent increase in interest income to N110.77 billion, from N95.59 billion in the corresponding period in 2018. Component of interest income during the periods reflected the combination of income from financial assets not at and at fair value through profit or loss (FVTPL).
The bank also reported a non-performing loans (NPL) ratio of 10 percent for Q1 2019 compared to 4.7 percent as at Q1 2018 due to acquired NPLs from the merger as implied by the bank.
Capital adequacy ratio (bank) also stood at 17.2 percent as reported by the bank.
“We believe this is inclusive of the debt raise of US$162.5 million,” analysts at CSL opined.
“We have a buy rating on Access Bank with a target price of N10.32/s,” analysts further stated in a report released on Tuesday.
Our analysis shows that PAT in Q1 2019 accounts for about 43 percent of total net income realised in full-year 2018, after the bank recorded a PAT of N94 billion in 2018. This signifies the resultant effect of the consolidation with Diamond Bank.
This also signifies the biggest growth in the bank’s net income in the last eight years (since 2012).
The total assets of the combined entity grew to N6.4 trillion (N4.9trn in Dec 2018) while total equity grew to N568.7 billion (N482.6bn in Dec 2018) with a total number of issued shares of 35.5 billion.
Share performance on Tuesday didn’t reflect fundamentals of the new entity as the financial report was released later in the day after the market had closed.
Shares of Access Bank appreciated marginally by 0.83 percent on Tuesday with a year-to-date performance of 11 percent.
David Ibidapo
