Access Holdings posts record N1.4 trillion annual revenue but profit drops

Nigeria’s biggest lender Access Holdings posted its biggest revenue on record in 2022 after a sharp boost from interest on loans.

But after-tax profit still slowed even when turnover increased by as much as 42.8 per cent or N416 billion, according to its audited financials released on Thursday.

The financial services group saw interest earned from giving credit to borrowers surge by almost half to N770 billion but the bigger slice of that was devoured by interest expense, the cash it paid customers in exchange for keeping their deposits.

As regulation demands Access Holdings made all allowance of N197.6 billion in its revenue pool to cover loans, whose chances of being repaid are uncertain, and also depreciation of its financial assets, weakening earnings.

The figure was 138 per cent higher than a year ago, a pointer to deteriorating credit quality.

Earlier in April, the group’s commercial banking unit Access Bank received $300 million to drive expansion in Africa, where the lender has completed a raft of merger deals in the past two years.

In the preceding month, it commenced the business combination process that will unite its Zambian subsidiary, Access Bank Zambia Limited and African Banking Corporation Zambia Limited into a single entity.

Net fee and income for the review period advanced 23.2 per cent to N145.7 billion, helped by a spike in credit-related fees and commissions.

Further straining profit, operating expenses galloped from N232.2 billion to N341.7 billion, the major pain points including IT and e-business expenses, administrative costs as well as premises & equipment costs.

Profit before tax contracted by 5 per cent, while profit for the year dipped to N152.2 billion from N160.2 billion.

Access Holdings announced in another document a final dividend per share of N1.30, taking its total for the year to N1.50.

That compares to the N1 per share paid for 2021, meaning the planned cash reward for last year surpasses the preceding year’s by 50 per cent.

Access Holdings’ shares appreciated by 10 per cent at market close in Lagos, where the stock is quoted at N9.9 per unit, following the news of planned dividend payment.