November 10, (THEWILL) – Access Holdings Plc, the parent company of Access Bank, Nigeria’s largest bank by assets, is inching towards a N50 trillion assets mark – the highest ever recorded by its industry peers.
According to its Q3 2024 interim report filed at the Nigerian Exchange (NGX) last week, the Group’s total assets surged to N41.1 trillion. This constitutes a 54.0per cent year-to-date rise as at September 30, compared to N26.6 trillion posted in the corresponding period of 2023.
Major components of the expanding balance sheet include Customer deposits which saw an impressive rise of 45.4 per cent, increasing from N15.3 trillion in December 2023 to ¦N22.3 trillion by Q3 2024, while gross loans and advances grew 56.2 per cent, reaching N13.9 trillion. This is coming nearly two years into its five-year Corporate Strategic Plan (2023-2027), as the Group has further raised the bar – consolidating on its prime status as Nigeria’s largest quoted company, by assets – moving remarkably to attaining a N50 trillion balance sheet by the end of 2024.
This reflects in its overall impressive performance in the nine month period incorporating Q3 as of September 30, 2024, as the Group recorded a 114.5 per cent, year-on-year increase in Gross Revenue to N3.4 trillion in Q3 from N1.6 trillion in the corresponding period of 2023.
Analysis of the report showed that the triple growth in topline was driven by Interest income, which constituted a 70 per cent of gross revenue at N2.4 trillion, while non-interest income contributed N1.0 trillion. This marks an 87.2 per cent increase due to higher transaction volumes on digital channels and other alternative platforms.
Notwithstanding inflationary pressures, the cost-to-income ratio remained stable at 60.8 per cent, while profit before tax saw an 89.6 per cent rise to N558.2 billion, and profit after tax rose 82.8 per cent to N457.7 billion. This impressive performance translated to an annualised return on equity of 22.2 per cent, with earnings per share up to N12.40.
The Group’s impressive performance cut across its banking and non-banking subsidiaries, including Access ARM Pensions, Hydrogen Payments, and Access Insurance Brokers. Subsidiaries in the UK and across Africa performed particularly well, delivering 54.8 per cent of the Banking Group’s profit before tax, an increase of 185.8 per cent year-on-year.
The non-banking subsidiaries of Access Holdings also delivered consistent growth. Access ARM Pensions, following a merger with ARM Pensions, now oversees N3.1 trillion in assets under management.
Hydrogen Payments processed ¦N27.5 trillion in transactions, growing its operating profit by 516 per cent year-on-year to ¦ 5.7 billion. Access Insurance Brokers, still in its first year of operations, posted a gross written premium of ¦ 8.3 billion and a profit before tax of ¦ 641 million. New entrant, Oxygen X Finance, the group’s digital lending subsidiary, reported ¦ 2.1 billion in operating income and a profit before tax of ¦ 412 million.
THE CORPORATE STRATEGY
At the lunch of the 5-year plan, Access Bank said it was set to move into the new strategic cycle with the following records: over 52 million customers which is more than the population of 85 percent (50) of African countries.
Superior service through four SBUs, across 17 countries including, the UAE, UK, and 3 rep offices in China, India and Lebanon. There is 18.5 million unique mobile app and internet banking users, in addition to over 54,440 Point of Sale (PoS) terminals.
There is consistent financial performance as seen in the N906.9 billion gross earnings and N148.7 billion profit before tax as at nine months of 2022. Its professional staff stood at 6,000 and capital adequacy ratio (CAR) comfortably sitting at 22.6 percent.
“Our score sheet is robust and we are launching into the next strategic cycle with the greatest optimism that we will achieve and surpass our targets,” said Herbert Wigwe, then Group Managing Director/CEO.
Wigwe said, in launching into the continental space, the focus was to become a global player with African heritage while exploring the huge opportunities with the aid of technology.
“By 2027, we expect the Nigeria Bank to be contributing c.52 per cent of revenues compared to c.82 per cent (9M’22). The new verticals will also be contributing c.12 per cent of total revenues, as revenues from African Subsidiaries is expected to double over the next fie years”, he added.
The bank stated that, across Africa, there is an opportunity for Access to extend financial services to the unbanked and deepen its financial services offerings to banked customers.
This is targeted at about 370 million Africans who do not have access to financial services, with Nigeria accounting for up to 60 million. It noted that banked customers are demanding deepening of financial services including loans, payments, insurance. Access Corporation identified addressable market pool through which international trade flows and growth opportunities in potentially untapped retail insurance markets. This is on the heels of Africa’s insurance penetration being generally lower than global average. It said AfCFTA will connect large swathes of the countries into a virtual trading zone.
Specifically, the Corporation says it sees opportunities in over $24 billion revenues for African electronic payments industry growing at 30 per cent yearly.
It also sees opportunities for over $3.6 billion in value of regulated consumer lending business in Nigeria, $950 billion total trade volume in sub-Saharan Africa, $100 billion in formal remittances and cross-border payments flows. Others are over 400 companies with annual revenues of $1 billion or more.
The Group said 150 companies that operate out of its subsidiary countries is a huge strength, adding that its footprint will grow significantly in the next strategic period. “We will capitalise on our strong M&A capability and ability to build organically to create value with each expansion, prioritising countries with better sovereign rating and complementary business landscape,” the holco stated.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
