April 16, 2025/Cordros Report
Access Holdings Plc (ACCESSCORP) published their 2024FY audited financials after the close of business yesterday (April 15). ACCESSCORP gross earnings surpassed the NGN4.00 trillion mark, increasing by 88.0% y/y to NGN4.88 trillion. The performance was driven by growth in the group’s interest (+110.4% y/y) and non-interest (+49.2% y/y) income lines. The board proposed a final dividend of NGN2.05/share (2023FY: NGN1.80/share), translating to a dividend yield of 9.6% based on the last closing price of NGN21.40/share (April 15), bringing the total dividend for 2024FY to NGN2.50/share (2023FY: NGN2.10/share).
Interest income grew by 110.4% y/y to NGN3.48 trillion, underpinned by the (1) elevated yield environment and (2) uptick in the group’s earning assets (+71.1% y/y to NGN29.63 trillion). Analysing by segments, the group recorded growth across all income streams – investment securities (+99.6% y/y to NGN1.64 trillion), loans and advances to customers (+118.3% y/y to NGN1.63 trillion), loans and advances to banks (+80.3% y/y to NGN143.45 billion), and cash and bank balances (+996.9% y/y to NGN65.86 billion).
Expectedly, the HoldCo’s interest expense also spiked by 130.7% y/y to NGN2.21 trillion, reflecting the rising interest rates. Precisely, ACCESSCORP incurred higher costs across the group’s funding base – deposits from customers (+96.3% y/y to NGN992.30 billion), deposits from financial institutions (+197.6% y/y to NGN954.72 billion), borrowings (+162.1% y/y to NGN207.84 billion), and debt securities (+2.6% y/y to NGN53.23 billion). Accordingly, net interest income settled at NGN1.27 trillion, translating to a +82.4% y/y growth. Given the NGN245.32 billion credit impairment charges incurred, the net interest income ex-LLE expanded by 84.0% y/y to NGN1.02 trillion.
Further down, non-interest income also advanced by 49.2% y/y to NGN1.30 trillion as the higher gains from net fees and commission income (+99.8% y/y to NGN415.24 billion) and equity investments (+79.8% y/y to NGN346.39 billion) offset the 55.6% y/y decline in income generated from investment securities (NGN127.46 billion). Consequently, the group’s operating income grew by 62.7% y/y to NGN2.32 trillion.
Operating expenses surged by 108.5% y/y to NGN1.45 trillion, as the group incurred higher costs on personnel (+127.2% y/y to NGN381.41 billion), administrative expenses (+5,530.5% y/y to NGN221.39 billion), and regulatory fees – AMCON levy (+63.1% y/y to NGN112.23 billion) and NDIC premium (+33.7% y/y to NGN47.67 billion). Considering the group’s OPEX advanced faster than operating income, the cost-to-income ratio (ex-LLE) settled higher at 62.7% relative to 48.9% in the prior year.
Overall, profit before tax was 18.9% y/y higher at NGN867.02 billion. Likewise, profit-after-tax grew marginally by 3.7% y/y to NGN642.22 billion after considering the income tax expense of NGN224.80 billion – Windfall levy: NGN55.35 billion.
Comment: We like ACCESSCORP’s performance as the group continues to leverage its robust asset base and the prevailing yield environment to deliver strong core income growth. Notably, ACCESSCORP recorded marked growth in the group’s asset portfolio (+55.5% y/y to NGN41.50 trillion), retaining the top spot as the bank with the largest asset base. However, ACCESSCORP continues to battle with cost pressures, with the highest CIR print among its peers (62.7 % | Tier-1 average: 43.1%). Looking ahead to 2025E, we believe the group will maintain this positive momentum, particularly as the elevated interest rates and accelerated risky asset creation remain a catalyst for earnings growth. In addition, we believe that the group’s non-banking verticals will continue to boost non-funded income. Our estimates are under review.
