Access Holdings Expands Loan Book on Strength Of N36.5trn Assets Growth in H1 2024
It recorded a whopping balance sheet of N36.5 trillion from N26.6 trillion as of December 31, 2023, constituting a 37.2 percent increase.
Access Holdings Plc is expanding its loan book apparently to support the $1 trillion economy ambition of the Nigerian government through facilities to the real sector as its balance sheet soars.
According to its audited earnings report for the half year (H1 2024) ended June 30, issued on Saturday, the Group maintained the lead as Nigeria’s largest financial institution by assets.
It recorded a whopping balance sheet of N36.5 trillion from N26.6 trillion as of December 31, 2023, constituting a 37.2 percent increase, thereby consolidating its position as Nigeria’s largest financial services institution by asset.
The impressive performance accrued from various segments of the group’s operations which reflected sterling results amid a challenging environment that triggered punching headwinds in the economy. This reflected in the performance of the loan book which has remained strong over the years, according to data from its financial statements.
For instance, in an unyielding bid to support the economy, the Group expanded its loans and advances to customers during the period by N2.7 trillion representing a 34.8 percent from N8.0 trillion in December 2023 to N10.8 trillion in six months ended June 30, 2024.
A look at the disaggregated loan portfolio during the review period showed significant increase in facilities to the real sector such as agriculture which increased to N179 billion from N96.3 billion as of December 31, 2023.
Facilities to manufacturing (industries) climbed to N852.2 billion against 345.2 billion at the end of 2023. Power and energy sector received N668.3 billion facilities against N4.5 billion while oil and gas upstream was supported with N864.4 billion compared to N570,4 billion in 2023.
Facilities to general commerce constituted the largest loans and advances made by the Group during the period; it rose to N1.7 trillion from N1.2 trillion as of December 31, 2023.
Its large total assets value also attracted the highest statutory Asset Management Corporation of Nigeria (AMCON) and Nigeria Deposit Insurance Corporation (NDIC) levies in H1 2024.
During the period, the Group posted an AMCON levy of N112.2 billion, representing an increase of 63 per cent from the N68.81 billion reported in H1 2023, and N22.19 billion deposit insurance premium, constituting about 37.3 per cent increase from the N16.16 billion reported in H1 2023.
Apparently, in order to demonstrate its commitment to the support aimed at growing the troubled economy, the Group set apart N122.7 billion of its interest income to cover loans not certain to be repaid by borrowers who have missed several repayments.
That figure was more than three times the N37.1 billion the Group provisioned for the same purpose in the corresponding period of 2023. This followed the high interest regime that occurred from the hike in monetary policy rate by the Central Bank of Nigeria Monetary Policy Committee (MPC) since the year, currently at 26.75 percent.
Analysts predict a high level of non-performing loans this year following the tough operating environment underscored by high inflation, insecurity and infrastructure deficit which contribute to the worsening lack of enabling environment.
Emphasizing on the importance of strong asset quality, Professor of Finance and Accounts at the Nasarawa State University, Keffi, Muhammad Mainoma, had told THEWILL that strong asset base is strategic to the development of any business because an enterprise is handicapped if it trades with a lean balance sheet.
“Strong asset base signifies that a business is strategically positioned to take advantage of its environment. For a bank, there is no time that people will not need money. Once a business is focused and invests in areas that people always need, it will not lose. This explains the continuous growth (in asset) despite the difficult operating environment,” Mainoma, a former president of the Association of National Accountants of Nigeria (ANAN), had said.
The Group’s impressive performance reflected in a 29 percent growth of shareholders’ equity to N2.8 trillion from N960 billion in H1 2023 as it achieved a record N2.2 trillion gross revenue during the period against N940 billion last year representing a growth of 233.5 percent.
This increase was supported by higher interest and non-interest earnings in the period. Interest income surpassed the N1 trillion mark, from the expansion of risk assets and effective pricing,
This led to a 142% growth from N606.8 billion in half year 2023 to N1.47 trillion by half year 2024. Non-interest income also grew by 117%, rising from N333.4 billion in half year 2023 to N723.6 billion in half year 2024.
Profit before tax increased by 108.2% year-on-year, from N167.6 billion in half year 2023 to N348.97 billion in half year 2024, while profit after tax rose by 107.7%, from N135.4 billion to N281.3 billion over the same period. This resulted in a 103% growth in earnings per share (EPS), which increased from N3.74 in half year 2023 to N7.58 in half year 2024.
THEWILL had reported that the Group’s impressive performance mirrored acceleration towards the 2027 targets as contained in its five-year strategic plan (2023-2027).
It also underlines the group’s corporate strategies in forming a holco structure two years ago (March 2022) during which it recorded enhanced expansion that would consolidate its grips on industry leadership as Nigeria’s largest quoted firm by assets.
At the presentation of the five-year strategic plan in Lagos in January 2023, the former Group Chief Executive Officer (CEO), Access Corporation, Mr Herbert Wigwe, emphasised that its expansion programme would be driven by technological innovation. Apparently to maintain its industry leadership narrative.
“By the end of 2027, we expect to be in at least 26 countries and in at least 3 Organisation for Economic Co-operation and Development (OECD) countries supporting trade (in the United Kingdom, France and the United States of America).
“The customer acquisition drive to hit 100mn for the Retail Business by 2027 will continue, as we emigrate the majority of customers to digital platforms by 2027 across touch-points.”
He added, “We want to be a global player with African heritage. We are a growth-oriented organisation and we will continue to invest in our people amid changes.”
