FSDH Initial Reaction: Access Holdings 1Q24 results 
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May 2, 2024/FSDH Research

Key Performance Highlights:

• After delivering robust performance in FY23, Access Holdings maintained the trend and recorded a massive 129.2% YoY rise in gross earnings to N974.2 billion in 1Q24. The gross earnings were primarily driven by a surge in interest income calculated using the effective interest rate (+142.3% YoY to N608.1 billion), followed by rise in Interest Income on financial assets at FVTPL (up 35.5x YoY to N111.5 billion), increased fee and commission income (+83.4% YoY to N112.4 billion), and growth in other operating income (+511.4% YoY to N23.0 billion). During 1Q24, interest income on investment securities ballooned 183.1% YoY to N719.6 billion compared to N254.2 billion in 1Q23 due to higher volumes and the high-yield environment. The Group’s Interest expense soared 179.3% YoY to N443.9 billion in 1Q24 due to increased deposits from customers and financial institutions. Consequently, the net interest income vaulted 189.4% YoY to N275.7 billion in 1Q24 (1Q23: N95.3 billion).
   
• Although net impairment charges spiked by 21.8% YoY to N22.8 billion in 1Q24 due to impairment on investment securities, the net interest income after loan impairment charges jumped 230.3% YoY to N252.9 billion in 1Q24. The fee & commission income increased 83.4% YoY to N112.4 billion in 1Q24, owing to higher credit-related fees and commissions and other e-business income. Fee & commission expenses grew 60.7% YoY to N25.5 billion, primarily driven by higher e-banking expenses in 1Q24.
   
• In 1Q24, the Group’s fair value and foreign exchange gain increased 12.7% YoY to N119.2 billion, and other operating income jumped to N23.0 billion in 1Q24 from N3.8 billion in 1Q23 primarily due to dividends on equity securities and recovered bad debts. The Group’s personnel expenses vaulted 137.9% YoY to N79.8 billion owing to increased wages and salaries, and other operating expenses were up 69.8% YoY to N176.6 billion in 1Q24 due to AMCON charges, Professional fees, and IT and e-business expenses. The Company paid an effective tax at the rate of 21.4% in 1Q24 compared to 12.2% in 1Q23, resulting in a reported profit after tax of N159.3 billion in 1Q24 versus N71.8 billion in 1Q23, a 121.8% YoY rise. The diluted earnings per share jumped 118.9% YoY to N4.35 per share in 1Q24 vs. N1.99 per share in 1Q23.
   
• Sequentially, the gross earnings marginally decreased by 2.7% QoQ to N974.2 billion in 1Q24 (4Q23: N1,001.0 billion). Moreover, the net interest income declined 9.7% QoQ to N275.7 billion in 1Q24 (4Q23: N305.4 billion), and fair value and foreign exchange gain also declined 62.1% QoQ to N119.2 billion in 1Q24 (4Q23: N314.3 billion). However, the net fee and commission income surged 46.6% QoQ to N86.9 billion, and the net impairment charges declined 70.7% QoQ to N22.8 billion in 1Q24 compared to N77.7 billion in 4Q23. Furthermore, Access Holdings paid an effective tax at 21.4% in 1Q24 compared to 15.1% in 4Q23. Consequently, the Group’s profit after tax declined 56.8% QoQ to N159.3 billion in 1Q24 versus N368.9 billion in 4Q23.
   
• On 19 April 2024, Access Holdings held its Annual General Meeting and passed various resolutions. Some important resolutions are:

1. Increased the Issued Share Capital of Access Holding from N17,772,612,811.00 to N26,658,919,216.50 by creating 17,772,612,811.00 ordinary shares of N0.50 Kobo each ranking pari-passu with the existing ordinary shares of the Company.
2. Amended clause 6 of the Company’s Memorandum of Association and the Share Capital Article in the Company’s Articles of Association to reflect the new share capital of N26,658,919,216.50 .
3. Authorized Board of Directors of the Company to establish a capital raising programme of up to USD 1.5 billion or its equivalent through the issuance of ordinary shares, preference shares, Alternative Tier 1, convertible and/or non-convertible notes, bonds or any other instruments, whether by way of a public offering, private placement, rights issue, book building process or any other method or combination of methods.
4. Authorized the Group to raise capital of up to N365 billion by way of a rights issue determined by the Directors, subject to obtaining the approvals of the relevant regulatory authorities.
5. Re-appointed Mr. Aigboje Aig-Imoukhuede, Mr. Olusegun Ogbonnewo, and Mrs. Ojinika Olaghere as Non-Executive Directors.

Market Reaction: The investor reaction to the 1Q24 results was positive as the stock increased by 3.86% to close at N17.50 versus a 0.55% gain for the All-Share Index on 2/5. 

Access Holdings Earning Highlights 1Q24

Source: Company Financials, FSDH