Access Bank Positions Self for Possible Negative Shocks

By Dipo Olowookere

Group Managing Director of Access Bank Plc, Mr Herbert Wigwe, has assured that the lender was strong enough to withstand any macroeconomic challenges that may come its way.

Mr Wigwe gave this assurance while reacting to the solid earnings delivered by the bank in the first quarter of 2019.

In the Q1 2019 results, the financial institution reported a double digit growth in its topline, bottomline and balance sheet.

Business Post reports that Access Bank grew its gross earnings by 16 percent to N160.1 billion in Q1 2019 from N137.5 billion in Q1 2018, with interest and noninterest income contributing 69 percent and 31 percent respectively.

Also, interest income appreciated by 16 percent year-on-year to N110.8 billion in Q1 2019 from N95.6 billion in Q1 2018, with the non-interest income rising to N49.3 billion in Q1 2019 in contrast to N41.9 billion in Q1 2018.

In addition, the profit before tax for the period rose by 66 percent to N45.1 billion from N27.2 billion, while profit after tax increased by 88 percent to N41.2 billion from N21.9 billion.

Furthermore, the asset base of the bank remained strong and diversified with growth of 30 percent YTD in total assets to N6.43 trillion in March 2019 from N4.95 trillion in December 2018, with the net loans and advances totalling N2.74 trillion as at March 2019 against N2.14 trillion in December 2018.

Customer deposits increased by 53 percent to N3.92 trillion in March 2019, from N2.57trn in December 2018, with the Capital Adequacy Ratio (CAR) remaining adequate at 19.5 percent, reflecting the impact of its merger with Diamond Bank late last month.

Taking into consideration the regulatory transitional arrangement of IFRS 9 implementation, CAR stood at 23.0 percent, while liquidity ratios of 47.6 percent versus 46.30 percent in December 2018 remained well above regulatory requirements.

The non-performing loans (NPL) ratio stood at 10.0 percent as at March 2019 in contrast to 2.5 percent in December 2018, with the cost of risk decreasing to 0.5 percent in Q1 2019 from 1.0 percent in Q1 2018 due to adequacy of provisions taken as at December.

Commenting on the results, Mr Wigwe said, “The group delivered solid earnings underscoring the value potentials of the newly expanded business model. Gross earnings showed a 16 percent increase to N160.1 billion from the prior year, comprising strong earnings on interest income and non-interest income of 69 percent and 31 percent respectively, whilst profit before tax (PBT) grew by 66 percent to N45.1 billion.

“Our capital and liquidity position remained above regulatory levels, with CAR at 19.5 percent and liquidity ratio of 47.6 percent further demonstrating the capacity of the enlarged balance sheet to cope with possible negative shocks.

“Following the successful completion of the merger with Diamond Bank in March 2019, we have now fully positioned ourselves in the retail market with a view to bringing the power of banking to the doorsteps of millions.

“We are providing a broader platform to facilitate payments services in Nigeria and across Africa, by harnessing our significantly enhanced digital technology capabilities.

“We have made solid progress throughout the first quarter of 2019 in line with our 2018-2022 five-year strategy, and we remain committed to the achievement of our strategic imperatives going forward; as we continue to invest in our people, technology and most importantly, our product offerings to customers.

“Our focus is to become the world’s most respected African Bank by leveraging on the strength of our retail and wholesale business to provide unrivalled value to our customers.”

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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