FSDH Initial Reaction: Access Holdings 1Q23 results 
Kindly click here to download the report

April 26, 2023/FSDH Research

Key Performance Highlights:

• Access Holdings recorded a strong 43.7% YoY rise in gross earnings to N424.9 billion in 1Q23, primarily driven by a 56.6% YoY jump in interest income calculated using the effective interest rate along with significant growth in foreign exchange gains (+30.9% YoY), partially offset by the decline in interest income on financial assets at FVTPL and lower other operating income. Interest income on investment securities jumped 46.4% YoY to N254.2 billion in 1Q23 compared to N173.7 billion in 1Q22 due to increased volume and improved securities yield during the period. The Group’s Interest expense vaulted 84.1% YoY to N158.9 billion in 1Q23 due to increased deposits from customers (+82.2% YoY). Consequently, the company’s net interest income grew 9.1% YoY to N95.3 billion in 1Q23.
   
• However, a 36.7% YoY jump in net impairment charges to N18.7 billion in 1Q23 resulted in the net interest income after loan impairment charges growing by 3.9% YoY to N76.6 billion in 1Q23. The fee & commission income increased 8.8% YoY to N61.3 billion, primarily due to higher financial services commissions (+41.1% YoY) in 1Q23. Fee & commission expenses increased by 18.5% YoY to N15.9 billion, driven by a rise in E-banking expenses (+17.1% YoY).
   
• In 1Q23, the group’s net losses on financial instruments held at fair value declined 85.0% YoY to N6.7 billion compared to N44.6 billion in 1Q22. Net foreign exchange gain surged 30.9% YoY to N112.4 billion in 1Q23 against a net gain of N85.8 billion in 1Q22. The group’s personnel expenses grew 14.8% YoY to N33.6 billion, and other operating expenses spurted 35.4% YoY to N104.1 billion in 1Q23 due to rising inflation. Although the company paid an effective tax at the rate of 12.2% in 1Q23 compared to 11.8% in 1Q22, Access Holdings reported a profit after tax of N71.7 billion in 1Q23 versus N57.8 billion in 1Q22, a 23.9% YoY rise. The basic earnings per share came in at N2.06/share in 1Q23 versus N1.65/share in 1Q22.
   
• Sequentially, the gross earnings decreased by 11.6% QoQ to N424.9 billion in 1Q23. However, net interest income grew 9.1% QoQ, primarily due to higher interest income on financial assets at FVTPL and lower interest expenses. The fee and commission income marginally declined by 4.4% QoQ, while the fee & commission expense increased by 17.3% to N15.9 billion in 1Q23. Notably, net impairment charges declined 87.1% QoQ to N18.7 billion in 1Q23 compared to N144.8 billion in 4Q22 (the group recognised ₦103.1 billion in economic loss impact of Ghana’s sovereign debt crisis in 4Q22). Moreover, Access Holdings reported a net foreign exchange gain of N112.4 billion in 1Q23 versus a net foreign exchange loss of N62.4 billion in 4Q22. Furthermore, the company paid an effective tax at the rate of 12.2% in 1Q23 compared to 22.0% in 4Q22. Consequently, Access Holdings reported a profit after tax of N71.7 billion in 1Q23 versus N15.0 billion in 4Q22, a massive 376.2% QoQ rise.

Market Reaction: The investor reaction to the solid 1Q23 results was buoyant as the stock jumped 7.07% higher to close at N10.60 versus a 0.49% gain for the All-Share Index (25/4).

Access Holdings Earning Highlights 1Q23

Source: Company Financials, FSDH