Access Holdings Plc maintained its position as Nigeria’s largest banking group, boasting total assets reaching N32.6 trillion as of March 31, 2024.
The company experienced a remarkable 129 percent increase in gross earnings during the review period, with net interest income surging by 189 percent to N275.72 billion and non-interest income climbing by 49 percent to N254.64 billion in Q1’2024.
Despite facing increased interest expenses (179%), operating expenses (84%), and income tax expenses (337%), the HoldCo demonstrated resilience, reporting a profit before tax of N202.74 billion (148% year-on-year) and a profit after tax of N159.29 billion (122% year-on-year).
In Q1’2024, Access Holdings Plc exhibited remarkable revenue growth, with gross earnings soaring by 129 percent year-on-year.
This impressive performance was primarily driven by a remarkable surge in interest income, which rose by 183 percent.
Additionally, fee and commission income experienced a substantial increase of 83 percent, amounting to N112.38 billion. Operating income witnessed an extraordinary surge of 511 percent, further contributing to the company’s revenue stream.
Moreover, a 13 percent fair value and FX gain totaling N119.23 billion also bolstered the revenue figures.
Despite a significant increase in interest expenses, resulting in a noteworthy net interest income growth of 189 percent, the overall revenue stream was further supported by a healthy uptick of 49 percent in non-interest income.
This comprehensive growth across various revenue streams underscores.
Despite a marginal increase in net impairment charge, the company’s net interest after impairment surged significantly by 230 percent, reflecting a commendable performance in managing credit risk. Consequently, the profit before tax exhibited robust growth, climbing by 148 percent compared to the same period last year.
However, it’s important to note that income tax expenses witnessed a substantial spike of 337 percent, impacting the overall profitability. Nonetheless, the profit for the period (PAT) registered a noteworthy increase of 122 percent, showcasing the company’s resilience and ability to generate sustainable profits.
Access Holdings Plc reported a substantial growth in EPS, which surged by 111 percent year-on-years, indicating an improvement in the company’s earnings performance on a per-share basis.
The company’s price-to-earnings (P/E) ratio stands at 3.9x, reflecting an undervalued position relative to its earnings.
Moreover, the price-to-book value (P/BV) ratio is notably low at 0.2x, suggesting a potential investment opportunity for value-oriented investors.
Access Holdings Plc maintains a strong balance sheet, with healthy growth observed in key balance sheet items such as cash and cash equivalents, investment securities, total loans and advances, total assets, total deposits, and borrowings.
The increase in cash and cash equivalents by 10 percent and investment securities by 60 percent underscores the company’s liquidity position and prudent investment strategy.
The company’s financial ratios depict a favorable trend, with a reduction in the cost-to-income ratio from 62 percent to 57 percent, indicating improved cost efficiency.
Additionally, the loan-to-deposit ratio remained stable at 44 percent, reflecting a balanced approach to managing liquidity and credit risk.
Return on equity (ROE) and return on assets (ROA) also witnessed significant improvement, standing at 6 percent and 0.5 percent respectively, signaling enhanced profitability and asset utilization.
Access Holdings Plc book value per share (BVPS) stands at N71.7, indicating the company’s net asset value per share.
The company’s equity position has strengthened, with a 17 percent increase in shareholder equity compared to the previous year. Despite the company’s strong financial performance, the stock is currently trading at an attractive valuation, with a P/E ratio of 3.9x, suggesting potential upside for investors.
However, it’s noteworthy that Access Holdings PLC faced challenges in the stock market, starting the year with a share price of N23.15 but experiencing a 27.2 percent decline since then.
This decline ranks it 146th on the NGX in terms of year-to-date performance.
The negative sentiment surrounding the stock is largely attributed to the Central Bank of Nigeria’s recapitalization demand.
