Access Holdings Plc, the parent company of Access Bank has set a new achievement in the banking industry.
According to its financial statement released on Wednesday, April 19, 2023, the financial company gross earnings increased to N1.38 trillion in 2022 from N971.8 billion recorded the previous year.
This is the first time a financial institution in Nigeria will cross the N1 trillion earnings in a single year.
Despite impressive gross earnings, Access bank after-tax profit for 2022 dropped to N152.20 billion from N160.215 billion reported in 2021.
The decline in profit was primarily attributed to the bank’s operations in Ghana.
Access Bank invests heavily in government debt offerings, including Treasury bills and bonds, like other financial institutions, because of its relative safety.
However, Ghana’s economic challenges led to debt restructuring, costing Access Bank a whopping N103.10 billion.
Part of the bank’s statement reads: “The Group took an impairment of N103.10Bn in recognition of the economic loss impact of Ghana’s sovereign debt crisis (Domestic debt and Eurobonds).
Also, Access Bank reports that it recorded impaired loans and advances of N176.94 billion.
What that means is that the bank was unable that its customers’ given loans and advances failed to pay.
Breakdown of Access Bank’s financial result
Income tax- N14.77 billion
Deposits from customers- N9.25 trillion
Loans and Advances to customers- N5.10trn
Fee and commission income- N197.58bn
Final dividend of N1.30 kobo per share for its shareholders worth N46.20 billion
Expert views
Speaking about the company’s results, Muyiwa Oni, Regional Head of Equity Research for West Africa at Standard Bank Group, said that the result was impressive and surprising as he expected Ghana bond default to have a bigger effect on Access earnings.
His words:
“I was expecting the worst in terms of earnings, because of the bank’s exposure to Ghana market currently going through challenging time.
“Many Nigerian banks are invested heavily in Ghana because of the juicy investment return. I was surprised that Access bank’s earning only dropped by 4% from 2021.
“However, I expect that many Nigerian banks, such as Access, with high exposure to sovereign debt, will start looking at risk in a more holistic way and trade carefully investing in other countries.
“But the biggest talking point is dividends. We expected a lower dividend payments but we were surprised that it is 15% higher than last year. In fact dividend payment is the highest across the industry.
