The largest lender in Nigeria in terms of total assets, Access Holdings Plc, produced a strong earnings result in the third quarter of the 2023 fiscal year, with an almost 83% increase in profitability year over year. Its unaudited report indicates that its profit after tax was N250.45 billion.
The business reported a 75.70% year-over-year growth in gross earnings to N1.593 trillion from N906.93 billion in its financial statement filed with the authorities. This gain was driven by both core and non-core income streams.
The double-digit growth in net interest income and revenue from fees and commissions over the period were the main drivers of the period’s spike in the top line. The monetary authority’s manipulation of high interest rates resulted in an improvement in net margin.
Nigeria’s private sector positioned financial services company’s net income advanced 83.12% year on year to N250.44 billion in 9 months 2023 while the company reported N314.60 billion in gains from foreign exchange gains.
Detail from the result posted on the Nigerian Exchange showed that interest income crossed the N1.00 trillion mark in the year’s first nine months, growing by 83.3% to N1.05 trillion.
This was driven by elevated interest rates in the period and the rise in the group’s earning assets, up by 41.5% from the beginning of the year to N14.55 trillion. As a result, analysts said the group recorded higher income across all contributory lines – investment securities, loans and advances to customers, loans and advances to banks, and cash and bank balances.
The Holdco’s interest expense spiked by 125.9% to N658.51 billion due to a high interest rate environment which started in the first half of 2022. This has pushed average lending rates from Nigerian deposit money banks higher.
Accordingly, net interest income settled at N389.96 billion, translating to a 39% year-on-year growth. This steep surge was supported by a better net margin from the lending business – its core income line.
Its financial scorecard indicated that the group’s non-interest income rose by 63.7% year on year to N485.65 billion. This was driven by the increased revenue generated from investment securities trading and fees and commissions.
Consequently, the group’s operating income grew by 55.2% to N813.78 billion. Amidst rising headline inflation, its operating expenses inched higher by 37.8%, primarily driven by an increase in personnel expenses, depreciation and amortization and regulatory charges.
Overall, profit before tax was 99.9% year on year higher at N294.42 billion. Likewise, profit-after-tax grew by 82.8% to N250.45 billion after accounting for the income tax expense of N43.97 billion.1
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