Access Holdings’ net profit for the first three quarters of the year surged by approximately 83 per cent, according to its unaudited financial statements, as West Africa’s largest lender saw a significant increase in its interest income.
Other key revenue streams also experienced notable growth.
Gross earnings more than doubled to N3.4 trillion, with interest income accounting for over 70 per cent of that figure, putting the company on track to meet its N5 trillion turnover target for the year.
However, much of the revenue generated by the financial services group did not translate into profit during the review period, as rising expenses weighed on earnings.
The net profit margin, which measures the proportion of revenue that converts into profit after tax, stood at 13.4 per cent, down from 15.7 per cent.
Access Holdings, aiming to position itself among Africa’s top five banks by 2027, is focusing on long-term growth by allocating a significant portion of its resources to expanding its presence in key markets outside Nigeria.
Return on equity stood at 14.6 per cent, compared to 11.9 per cent a year ago.
Interest expense accounted for as much as 64.8 per cent of the N2.4 trillion in interest generated during the period, leaving net interest income at N844.8 billion.
The amount that ultimately flowed into the bank’s coffers after accounting for impairments was more modest at N699.9 billion.
Access Holdings’ provisions for bad loans and other impaired financial assets rose by 134.5 per cent, reflecting the challenges that often accompany high lending rates.
Lenders in Nigeria have been charging higher interest rates, driven by the Central Bank of Nigeria’s decision to raise the reference lending rates by a cumulative 15.8 per cent since May 2022 to curb inflation.
While this has created a boom for banks, it has also placed considerable strain on businesses.
Fees and commissions for the period nearly doubled to N401.5 billion, primarily due to a surge in credit-related charges and e-banking income.
Pre-tax profit increased by 89.6 per cent to N558.2 billion, while post-tax profit rose to N457.7 billion, up from N250.4 billion.
Total comprehensive income jumped 142 per cent to N1.1 trillion, driven by unrealised foreign currency translation differences.
The financial services giant, now valued at N41.1 trillion in assets, is considering issuing dollar-denominated securities in two tranches to drive expansion and meet new capital requirements for banks in Nigeria, Roosevelt Ogbonna, CEO of its commercial banking subsidiary, told journalists on Monday in Lagos.
