First Half 2023: When Access Holdings Continues to Reap from Diversified Portfolio
ANALYSIS
For Access Holdings Plc, the bigger the merrier is the driving principle, as its solid performance keeps improving judging by the outstanding result of its half-year 2023 performance, which shows its sustained effort to generate value from a diversified business portfolio, spanning banking, asset management, and payment services, operational in 20 countries across four continents, writes Festus Akanbi
From the beginning of September, many blue chip companies have begun to roll out impressive results for the half-year 2023 operation. Analysts said more of it will be offloaded in the coming weeks as companies adjust to the realities of the final quarter of the year.
One of such top players is Access Holdings Plc, which announced its audited half-year ended June 30, 2023, financial statement during the week.
According to financial analysts, it is a result that will make the shareholders of the company happy because of the dividend implication and the assurance that their company is making significant progress both at home and in other jurisdictions where it maintains a solid presence. As for the board, management, and staff of the company, the result is a confirmation of the appropriateness of several decisions taken to expand its bouquet of offerings as well as its reach beyond Nigeria.
Access Holdings Half-year Performance
Key extracts of the audited report and accounts of Access Holdings for the first half ended June 30, 2023, showed that profit before tax jumped by 71.4 per cent to N167.6 billion in the first half of 2023 as against N97.79 billion recorded in the first half of 2022.
Profit after tax increased by 52.6 per cent from N88.94 billion in the first half of 2022 to N135.4 billion in the first half of 2023.
Top-line analysis showed that gross earnings increased from N591.80 billion to N940.31 billion. Earnings per share thus improved from N2.52 in the first half of 2022 to N3.74 in the first half of 2023. The headline growth was driven by a combination of a 63 per cent growth in interest income and a 51.9 per cent increase in non-interest income.
The balance sheet size rose by 39 per cent to N20.9 trillion by June 2023 while shareholders’ funds grew by 40.6 per cent from N1.23 trillion by December 2022 to N1.73 trillion in June 2023. Customers’ deposits rose by 35 per cent to N12.5 trillion.
This growth was inclusive of all business segments, firmly solidifying the Group’s stature as the largest financial institution in Nigeria by total assets. In a demonstration of the trust and confidence reposed in the institution by its customers, Access Holdings also witnessed a significant 35 per cent year-to-date growth in customer deposits, concluding the half-year at a commendable N12.5 trillion.
Analysts believed these striking figures underscore the efficacy of the Group’s strategic approach and its ability to generate value from a diversified business portfolio, spanning banking, asset management, and payment services, operational in 20 countries across four continents.
This position was confirmed by the management of the company, which explained that the growth in deposits underlined the trust and confidence reposed in the institution by its customers, noting that the deposit growth was inclusive of all business segments.
The Making of Strong Global Franchise
In July this year, Access Holdings sealed a deal to buy Standard Chartered Bank subsidiaries in four African countries. The move is said to have signalled Access Holdings’ most aggressive push for expansion beyond its home market Nigeria, ever since it began operation in Nigeria in 1989 as Access Bank.
The company has also entered into various pacts with Standard Chartered Bank (StanChart) to acquire the British Bank’s subsidiaries in four African markets.
From the records of the company’s annual report, African subsidiaries of Access Holdings Plc include Access Bank Sierra Leone, a subsidiary of Access Bank Plc, which operates six branches across the country. The list also includes Access Bank (Rwanda) Ltd, a commercial bank that operates in Rwanda and was officially launched in January 2009 after fulfilling all regulatory requirements.
Others include Access Bank Zambia, a subsidiary of Access Bank Plc with six branches across the country. There is Access Bank Ghana Plc, established in 2009 and it operates from 51 locations across the country. Others are Access Bank Kenya, formerly known as Transnational Bank Kenya; Access Bank South Africa, established in 1947 as The South African Bank of Athens; Access Bank Botswana, formerly called BancABC Botswana and Access Bank United Kingdom, a wholly owned subsidiary of Access Bank Plc which was incorporated in October 2007.
Access Bank Plc also has other smaller subsidiaries in other African countries such as Access Bank Cameroon with 100% equity, Access Bank Mozambique with a 99.98% stake, Access Bank Guinea S.A with 100% equity, Access Bank R.D. Congo with 99.98% ownership, Access Bank Gambia Limited with 88% stake.
In Nigeria, its subsidiaries include Access Pensions Limited and Hydrogen Payment Services Company Limited.
Hydrogen Pay is the fintech subsidiary of Access Holdings. It’s a technology company dedicated to addressing payment challenges for aspiring businesses.
“For Access Bank, these transactions represent a key step in our journey to build a strong global franchise focused on serving as a gateway for payments, investment, and trade within Africa and between Africa and the rest of the world as we continue to deliver on our vision to be the World’s Most Respected African Bank,” said Access Bank CEO Roosevelt Ogbonna.
Similarly, the Tanzania government has approved the deal involving the buyout of BancABC Tanzania as Access Holdings is looking to the Central Bank of Nigeria to approve the transactions.
Generating Value from Diversified Portfolio
Group Chief Executive Officer, of Access Holdings Plc, Mr. Herbert Wigwe said the first half performance underscores the efficacy of the group’s strategic approach and its ability to generate value from a diversified business portfolio, spanning banking, asset management, and payment services, operational in 20 countries across four continents.
He said Access Holdings’ synergies across its business verticals yielded remarkable results as shown by growths in incomes and the balance sheet of the group.
“Our growth plans for the African continent remain firm and clear, driven by the strong long-term growth prospects and trade opportunities seen across many of the countries.
“Continuing with our five-year cyclical strategy, our primary objective remains to transform Access Holdings Plc into a leading financial and ecosystem player, fostering opportunities for shared prosperity` among all stakeholders,” Wigwe said.
He outlined that the group’s pensions business surpassed the N1.0 trillion in assets under management (AUM) milestone, thereby ranking as the fourth largest pension fund administrator (PFA) by AUM and the second largest by the number of registered retirement savings accounts (RSAs).
According to him, the group’s payments vertical, Hydrogen, processed over N3.0 trillion in transactions, achieving a 407 per cent month-on-month growth in point of sale (POS) transactions and 99 per cent system uptime on account switching within the period.
He pointed out that despite operating in a high inflationary environment, Access Holdings improved its cost-to-income ratio (CIR) by 4.9 per cent, through prudent adjustments in personnel costs, effective management of regulatory fees, and continued investments in technology to enhance cost efficiency and improve the overall user experience.
Wigwe noted that the group’s regulatory ratios displayed a robust liquidity position and capital adequacy, surpassing regulatory thresholds with a liquidity ratio (LR) of 50 per cent and a capital adequacy ratio (CAR) of 19.1 per cent.
He said the results generally showed the group’s steadfast commitment and prominent industry standing in delivering sustainable returns to stakeholders.
