FSDH Initial Reaction: Access Holdings FY23 results 
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March 28, 2024/FSDH Research

Key Performance Highlights:

• Access Holdings recorded a robust 87.0% YoY rise in gross earnings to N2,594.7 billion in FY23, primarily driven by a 103.2% YoY spurt in interest income calculated using the effective interest rate, followed by rise in Interest Income on financial assets at FVTPL (+56.6% YoY) and fee and commission income (+40.4% YoY). Interest income on investment securities jumped 99.9% YoY to N1,654.3 billion in FY23 compared to N827.5 billion in FY22 due to higher volumes and the prevailing high-yield environment. The Group’s Interest expense ballooned 105.0% YoY to N959.0 billion in FY23 due to increased deposits from customers and financial institutions. Consequently, the Company’s net interest income grew 93.4% YoY to N695.4 billion in FY23.
   
• There was a 29.5% YoY decline in net impairment charges to N139.5 billion in FY23, and the net interest income after loan impairment charges jumped 243.4% YoY to N555.8 billion in FY23. The fee & commission income increased 40.4% YoY to N277.5 billion in FY23, primarily due to other e-business income as well as higher credit-related fees and commissions. In FY23, fee & commission expenses surged 34.4% YoY to N69.7 billion, driven by higher e-banking expenses.
   
• The group’s net foreign exchange gain declined 50% YoY to N17.3 billion in FY23, while fair value gains on equity investments jumped to N192.6 billion in FY23 from a mere N2.1 billion in FY22. Ultimately, the group’s Fair value and foreign exchange gain increased 87.4% YoY to N628.9 million. In FY23, personnel expenses vaulted 44.0% YoY to N167.9 billion, while the other operating income was up 23.4% YoY to N33.1 billion in FY23, and other operating expenses were up 36.4% YoY to N465.7 billion in FY23 due to Professional fees, Business travel expenses, AMCON surcharge, IT and e-business expenses, and Deposit insurance premium. The Company paid an effective tax at the rate of 15.0% in FY23 compared to 8.8% in FY22, resulting in a reported profit after tax of N619.3 billion in FY23 versus N152.9 billion in FY22, a 305.0% YoY growth. The basic earnings per share came in at N17.23/share in FY23 versus N4.46/share in FY22.
   
• In FY23, the group recorded a 65.6% YoY growth in total customer deposits to N15.3 trillion across all products and deposit segments. Total assets rose 78.0% YoY to N26.7 trillion at the end of FY23 from N15.0 trillion at the end of FY22, mainly due to growth in customer deposits. Moreover, the group’s cost of funds increased by 130 bps to 5.4% in FY23 from 4.1% in FY22 with the rising interest rate hikes in Nigeria and worldwide. The net interest margin increased by 140 bps to 5.4% in FY23. The Company achieved a moderate NPL ratio of 2.8% in FY23 (FY22: 3.1%). The capital adequacy ratio decreased slightly to 19.0% in FY23 from 19.6% in FY22, and the liquidity ratio was 51.8% in FY23, with sufficient buffers above the regulatory threshold.
   
• Access Holdings proposed a final dividend of N1.80 per share (bringing the total dividend to N2.10 per share in FY23 vs. the total dividend of N1.50 per share in FY22), subject to appropriate withholding tax and shareholder approval. The final dividend will become payable on 19 April 2024 to all shareholders registered in the Company’s books at the close of business on 10 April 2024.
   
• On 8 January 2024, Access Holdings announced that it had completed its acquisition of African Banking Corporation Zambia Limited, trading as Atlas Mara Zambia (Atlas Mara), after obtaining all requisite regulatory approvals. Once the merger is complete, the combined entities will become one of Zambia’s top five banks by revenue, with prospects of being in the top three by 2027.
   
• On 15 January 2024, Access Holdings announced that it obtained all required regulatory approvals for acquiring Megatech Insurance Brokers Ltd, an insurance brokerage company licensed and regulated by the National Insurance Commission.
   
• On 17 January 2024, Access Holdings announced that it obtained the Central  Bank of Nigeria’s approved-in-principle to establish a consumer lending subsidiary to be known as “Oxygen X Finance Company Limited”. The proposed subsidiary will commence operation upon obtaining the final operating license from the Central Bank of Nigeria.
   
• On 17 January 2024, Access Holdings announced that its flagship subsidiary, Access Bank Plc, has entered into a definitive agreement with the Ugandan-based Finance Trust Bank Limited and its selling institutional investors to acquire an 80% stake in Finance Trust Bank Limited.
   
• On 12 February 2024, Access Holdings announced the appointment of Ms. Bolaji Agbede as the Company’s Acting Group CEO following the unfortunate demise of its former CEO, Dr. Herbert Wigwe, on 9 February 2024.
   
• On 13 March 2024, Access Holdings announced the return of Mr. Aigboje Aigimoukhuede, CFR, as its executive chairman. He replaced Mr. Abubakar Jimoh, who remains an Independent Non-Executive Director on the board.
   
• On 20 March 2024, Access Holdings announced that its flagship subsidiary, Access Bank Plc has entered into a binding agreement with Kenyan-based KCB Group Plc to acquire the entire issued share capital of National Bank of Kenya Limited from KCB.

Market Reaction: The investor reaction to the FY23 results was positive as the stock increased by 3.90% to close at N24.00 versus a 0.32% gain for the All-Share Index on 27/3.

Access Holdings Earning Highlights FY23

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