September 23. 2024/CSL Research

Access Holding’s H1 2024 audited numbers showed a 142.6% y/y growth in Interest Income driven by growth in both Interest Income on Net Loans and on investment securities due to a higher yield environment and growth in earnings assets. Net Loans grew 34.8% in H1 2024 compared with the December 2023 position, inclusive of the impact of devaluation on foreign currency loans. Interest Expense also grew strongly reflecting the high-interest rate environment, up 150.6% y/y. Overall, Net Interest Income grew strongly, up 128.9% y/y but declined 13.8% q/q (Q2 compared with Q1). Customer Deposits were up 31.3% in H1 2024 compared with the December 2023 position also inclusive of the impact of devaluation on foreign currency deposits.

Net Fee and Commission grew strongly, up 132.6% y/y and 35.7% q/q. The strong y/y growth in Fee and Commission Income was driven mainly by growth in credit-related fees and commissions (up 86.2% y/y), account maintenance charge and handling commission (up 121.4% y/y), commission on other financial services (up 267.5% y/y) and channels and other E-business income (up 68.0%y/y).

H1 2O24

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Source: Company’s Financials, CSL Research.

Other Income (Fair value and foreign exchange gain/(loss) and Other Operating Income) was up 125.3% y/y to N468.9bn in H1 2024 from N208.1bn in H1 2023. Q/q Other Income was up 129.6%. The group reported Fair Value and Foreign exchange gain/(loss) of N406.9bn in H1 2024 compared with N192.0bn in H1 2023.

Impairment charge of N122.7bn was up 230.2% y/y bringing H1 2024 annualised Cost of Risk (COR) to 2.5%. The non-performing loan (NPL) ratio closed at 2.72% in half year 2024.

The bank’s operating expenses (Opex) surged by 126.6% y/y to reach N715.8billion. Q/q, Opex also grew strongly, up 56.3% in Q2 compared to Q1. This significant y/y uptick in Opex was moderated by a marginally higher growth in Total Operating Income, which rose by 128.1% y/y. Consequently, there was a marginal improvement in the Cost to Income Ratio (CIR ex provisions) to 60.3% in H1 2024 compared with 60.7% in H1 2023.The primary contributors to the notable Opex growth included a substantial rise in personnel expenses, up by 143.9% y/y, driven by adjustments for the cost of living.

Additionally, expenses related to Amcon charges grew significantly due to an enlarged balance sheet driven partly by the devaluation of the Naira. IT and e-business-related expenses due to the ongoing upgrade also grew significantly.

Overall, PBT was up 108.2% y/y to N348.9bn but PBT declined 27.9% q/q. Net Profit also grew 107.7% y/y to N281.3bn bringing H1 2024 annualised RoAE to 23.3% compared who 36.2% for FY 2023. Q/q Net Profit was down 23.4% in Q2 compared with Q1.

Access Holdings Plc declared an interim dividend of N0.45/s (H1 2023; N0.30/s), representing a 50% increase.

We have a Buy rating on Access Bank with a target price of N36.97/s. Current price of N19.00/s

Kindly click on the below link to download the full report.

​​​​​Access Holdings H1 2024 Quick Take.pdf​​​