Modupe Gbadeyanka
By Modupe Gbadeyanka
The management of Access Bank Plc has not hidden its intention to embark on an aggressive cut in operating expenses (OPEX).
The financial institution is considering some cost optimisation strategies to give value to shareholders, some of who are expressing worry over the company’s high cost of operations, which they feel is affecting profit and dividend payout.
Recently, Access Bank held its 31st Annual General Meeting (AGM) in Lagos and the Group Managing Director of the bank, Mr Herbert Wigwe, used the occasion to inform shareholders that the organisation was already addressing the issue high operating expenses.
He said the management was taking drastic measures to ensure that expenses are reduced significantly, adding the effect would be felt mostly in the second, third and final quarter of 2020.
Business Post reports that one factors behind the high OPEX of Access Bank is its merger with other banks.
Last year, years after acquiring Intercontinental Bank Plc, merged with Diamond Bank Plc.
But Mr Wigwe believes this transaction has produced a truly diversified institution with remarkable retail presence and solid wholesale market share.
According to him, the merger between Access Bank and defunct Diamond Bank has “propelled us towards achieving our five- year strategic objectives to create the largest bank in Nigeria by total assets as well as largest in Africa by customer base with over 36 million unique customers across the network.”
“Using an agile approach and with strong dedication, we have achieved a significant milestone in financial services on the continent whilst delivering the fastest and most seamless customer Day 1 integration globally.
“With the emergence of the new entity, the bank is well- positioned to cater to the retail business through a broader reach and product offerings tailored to individual customer needs and delivered efficiently.
“Access Bank is now a tier one retail banking franchise with strong digital payments capabilities and benefiting from a diversified business mix,” he told shareholders.
The bank executive said in the 2019 financial year, Access Bank delivered a 26 percent increase in gross earnings of N666.8 billion from N528.7 billion in 2018, comprising interest in-come growth of 41 percent from previous levels to N155.9 billion despite declining interest rate environment.
“The effects of an enlarged loan book contributed significantly to the interest income growth of N155.9 billion (+41 per cent y/y), leading to strong bottom-line figures.
“The net effect on operating income resulted in strong profit before tax (PBT) of N115.4 billion as against N103.2 billion in 2018.
“The strength of the performance reflects a growing franchise supported by digital capabilities and improving customer service touchpoints.
“The retail business gained momentum, leveraging opportunities in key sectors to consolidate market share dominance through our digital loans.
“The wholesale business also continued to soar in the year, following intense marketing drive and continued investment in the sector to deliver stronger synergies,” he said.
