Access Bank Plc released its full-year 2019 earnings report to the Nigeria Stock Exchange on Friday, March 6. The report, which shows the bank’s financial position following its merger with Diamond Bank Plc indicates a 26.10% jump in its Gross Earnings from the pre-merger revenue of NGN 390.91 billion (FY 2018) to NGN 536.84 billion in FY 2019. The growth in gross earnings was driven by a 40.94% spike in interest income from NGN 380.91 Billion in FY 2018 to NGN 536.84 Billion, as a result of the 26.47% increase in interest on loans and advances to customers and 32.35% increase in the interest income on investment securities.
The growth in the interest income was enhanced by the rise in the bank’s loan book by 43.45% to NGN 3.06 trillion in FY 2019. Also, interest expense advanced by 25.22% to NGN 259.16 billion, supported by the growth in interest expense on customers deposits by 34.73%, further settling the net interest income at NGN 277.22 billion from NGN 173.57 in the corresponding period of 2018.
The steeper loss of NGN 83.87 billion in foreign exchange transactions (NGN 26.76 billion loss in FY 2018) and also the decline in trading gains by 31.38% to NGN 66.10 billion resulted in a 12.12% drop in non-interest income to NGN 129.90 billion from NGN 147.82 billion in the corresponding period of 2018. Although over the period, the advancement in the bank’s income from its e-business services and bad debt recovery drove growth in fees and commission and other operating income by 47.91% and 323.68% to NGN 55.83 billion and NGN 91.84 billion respectively in FY 2019.
The Bank recorded a 30.83% rise in operating expenses due to an increase in personnel and other operating expenses. Meanwhile, the cost to income ratio settled at 68.74% in FY 2019 from 63.33% in FY 2018. The Tier 1 lender recorded a 11.81% and 2.66% increase in profit before tax and profit after tax of NGN 115.37 billion and NGN 97.50 billion respectively.
Net loans and advances in the period under review increased by 43.45% to NGN 3.06 trillion. Total assets expanded by 44.25% to NGN 7.14 trillion from NGN 4.95 trillion in FY 2018. Also, customer deposits rose by 65.92% to NGN 4.25 trillion from NGN 2.56 trillion in FY 2018.
The Bank declared a final dividend per share of NGN 0.40K (interim of NGN 0.65k), representing a dividend yield of 4.70%.
Greenwich Research
