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April 29, 2022/FSDH Research

Key Performance Highlights:

• Access Bank recorded a strong 33.1% YoY growth in gross earnings to N295.7 billion in 1Q22, principally driven by a massive net foreign exchange gain of N85.8 billion, coupled with a solid 44.5% YoY jump in fee & commission income and a 228.1% YoY rise in net gain on fair value hedge, partially offset by a 25.0% drop in the interest income on financial assets at FVPL and a N44.6 billion loss on financial instruments held at fair value (1Q21:N27.0 billion gain). The group reported increased interest income on investment securities due to increased volume and improved yield on securities during the period. Access bank’s net interest income edged lower by 7.0% YoY, resulting from a 73.2% YoY rise in interest expense to N86.3 billion in 1Q22, primarily driven by a 156.1% YoY spurt in deposits from customers.
   
• A 9.2% YoY jump in net impairment charges to N13.7 billion in 1Q22 further sank the net Interest Income after loan impairment charges by 9.5% YoY to N73.7 billion in 1Q22. The Fee & Commission Income spurted 44.5% YoY to N56.3 billion, as the credit-related fees and commissions shot up by 91.8% YoY to N21.1 billion in 1Q22. Fee & Commission Expenses vaulted 63.0% YoY to N13.4 billion, driven by a 58.4% YoY increase in E-banking expenses to N13.4 billion.
   
• Net loss on financial instruments held at fair value stood at N44.6 billion in 1Q22 compared to a gain of N27.1 billion in 1Q21, resulting from a loss on non-hedging derivatives. The group’s net foreign exchange gain in 1Q22 ballooned to N85.8 billion against a net gain of N1.1 billion in 1Q21. The group’s personnel expenses rose 45.8% YoY to N29.3 billion, and other operating expenses spurted 22.9% YoY to N76.8 billion in 1Q22. The group’s profit after tax climbed 10.0% YoY to N57.8 billion in 1Q22 against N52.6 billion in 1Q21. The basic earnings per share came in at N1.65/share in 1Q22 versus N1.49/share in 1Q21.
   
• Looking at the segmental loan book, Retail Banking (earlier Personal Banking) grew the most (+72.5% YoY) to N220.5 billion, followed by a 44.5% YoY jump in Business Banking to N189.6 billion in 1Q22. Corporate & Investment banking vaulted 38.7% YoY to N1,919.5 billion, coupled with a 12.9% YoY increase in Commercial Banking to N2,260.7 billion.
   
• In the company’s sequential performance, the gross earnings increased steadily by 6.1% to N295.7 billion in 1Q22. Net interest income vaulted 159.0% QoQ, primarily from a 105.4% QoQ jump in interest income on financial assets at FVPL to N13.4 billion in 1Q22. The fee and commission income spurted 24.1% QoQ, while the fee & commission expense fell 14.9% to N13.4 billion in 1Q22. Net gain on fair value hedge shot up 7045.3% QoQ to N17.5 billion in 1Q22, accompanied by a 500.4% QoQ jump in net foreign exchange gain, partially offset by a 77.1% QoQ rise in other operating expenses to N76.8 billion in 1Q22, resulting in a 50.9% QoQ rise in profit to N57.8 billion in 1Q22 against N38.3 billion in 4Q21.
   
• On April 27, 2022, Access Bank Plc sold $50 million Step-Up Green Notes due 2027 under its $1.5 billion Global Medium Term Note Programme through a private placement. The Notes will be issued in registered form with a settlement date of 3 May 2022 and a maturity date of 3 May 2027. Separately, Access Bank has obtained an operating license to set up a banking expansion in the Republic of Cameroon but has yet to commence operations.

Market Reaction: The investor reaction to the 1Q22 results was lacklustre as the stock closed 0.51% higher at N9.90 versus a 0.55% gain for the All-Share Index on Thursday (28/4). The stock further declined 2.02% to close at N9.70 on April 29.

Access Bank Earning Highlights 1Q22

Source: Company Financials, FSDH