March 9, 2017/Proshare Markets

Access Bank Plc today holds its Q4’16 Investors and Analyst Conference Call Earnings Presentation.

The bank stated that due to the volatility witnessed in 2016, the bank need to strengthen its liquidity position necessitating it to raise about $300m Eurobond and a commercial paper during the year.

Furthermore, the bank stated that the naira witnessed about 42% devaluation as at June 2016. The made some SMEs and manufacturing entities to find it extremely difficult to access the required FX to support their production process. In spite of these challenges, the bank still grew is gross earnings by 13%.

The key drivers of the bank’s growth in gross earnings are; strong fee and commission income; net trading income, largely as a result of change in balance sheet management strategy and other income which was primarily driven by gains on disposal of equity investment (₦16.2bn) limited the impact of the decline in net trading income recorded in the period.

The bank managed its coat of risk at 1.2% and its NPL ratio at 2.1% while an improvement was recorded in the bank’s capital adequacy ratio (CAR).

In a nutshell, below are the key takeaways from the 20116 FY earnings presentation made by the bank management;

•         The bank is secured in terms of its exposure to the Etisalat loan and the business of the company is good and safe compared to what the media is reporting.

•         The bank’s exposure to Etisalat is about N40bn and the interest is continually being serviced.

•         The bank’s exposure to MTN (N20bn), Airtel (N12) and Etisalat (N40bn) is just about 6.3%

•         The banks plans to achieve cost of risk of 1.2%, NPL of 3% and liquidity ratio of 45% in 2017

•         The bank intends to achieve above points through balance sheet optimization, cost containment and its Asset Quality