Access Bank
Plc, (Bloomberg: ACCESS NL /Thomson
Reuters: ACCESS.LG) (‘Access
Bank’ or ‘the Bank’), the full-service commercial bank with headquarters in
Nigeria and operations across Sub-Saharan Africa and the UK, has released its
audited results for the first half ended 30 June 2016, showing positive growth
in financial indices.
The Group
recorded a strong performance in the first six months of the year, reasserting
its capacity and resolve to deliver sustainable returns in spite of a tough
operating environment. In the audited financial results released to the
Nigerian Stock Exchange (NSE) on Friday August 19, 2016, Access Bank recorded
gross earnings of ₦174bn, representing an increase of 3% over the N168.3bn
recorded in the same period in 2015. The Bank proposes an interim dividend of
25Kobo per share.
Gross earnings were driven largely by steady income growth
from the Bank’s core business as interest income grew by 14% to ₦112.3bn in the
first half of 2016 from ₦98.9bn in the comparative period of 2015. The Group
posted a profit before tax of ₦50bn, a 28% year on year increase from ₦39.1bn.
Profit after tax was up26% in 2016 to ₦39.4bn, compared to ₦31.3bn in H1 2015.
In the face of challenging operating conditions such as
rising inflation and currency devaluation, the Bank’s key indices remained
stable: Capital adequacy stood above the regulatory minimum at 19%, while the percentage
ofnon-performing loans to total gross loans was 1.9%, which is significantly
lower than CBN’s threshold and one of the best industry wide. The Bank also
recorded gains in other financial indices; Net Interest Margin (NIM) was up 80bps
year on year at 6.4%, compared to 5.6% from 2015; Operating Income grew by 11%
to ₦130.2bn in half year 2016 compared with ₦117.6bn in the corresponding
period of 2015; Total Assets amounted to ₦3.27tn, up 26% from ₦2.59tn in
December 2015; and customer deposits grew 17% to ₦1.97tn from ₦1.68tn in
December 2015.
Commenting on the
results, Herbert Wigwe, Group Managing Director stated: The
Bank’s performance continues to be resilient in the face of a challenging
macro-economic environment, which has been further exacerbated by a
double-digit inflation and currency devaluation. Despite these macro
uncertainties, we delivered gross earnings of ₦174bn, while pre-tax profits
grew 28% to ₦50bn in the period. The results underscore our continued ability
to grow sustainably whilst effectively adapting to a challenging operating
landscape.
The prevalent macro-economic conditions put a strain on business
performance across the industry, with increased concerns about asset quality
deterioration. Despite these challenges, the Bank’s asset quality remained
stable, as non-performing loans stayed below industry average, in line with our
guidance. Our capital and liquidity levels were also sustained above regulatory
limits.
During the period, we grew our retail market share, leveraging
innovation and technology to create lifestyle products and enhance customer
experience. This growth has led to significant increase in our transaction
volumes and fee-related income. In addition, our cost of funds dropped by 170
bps year on year, reflecting the increase in our low cost funding base.
Notwithstanding the high inflation and the impact of the currency
devaluation on cost, operating cost remained stable owing to our cost
management initiatives. Optimising operational efficiency will remain an
imperative for the second half of the year, as we continue to see the benefits
of our cost initiatives intensify over the next few months.
We believe that macro conditions will remain challenging. Nonetheless,
our priority in the coming months will be to strengthen our position in the
industry; increasing focus on risk and operational efficiency, with
customer-centricity at the heart of our strategy.”
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