Access Holdings annual profit surges as revenue touches record N2.6 trillion
The surge in top-line now makes Access Holdings Nigeria’s biggest public company by revenue, confining the previous holder of the crown MTN Nigeria to the pillion seat.
Nigeria’s biggest lenderAccess Holdingsreported a fourfold acceleration in net profit that took bottom line to an unprecedented peak of N619.3 billion last year, according to the financial services group’s audited accounts issued Wednesday.
The jumbo climb in after-tax profit resulted from a dramatic improvement in gross earnings, which advanced 87 per cent to N2.6 trillion, also a record level.
The feat was recorded during the organisation’s last financial year under the leadership of Herbert Wigwe, the shrewd CEOwho died in the US last monthafter years in the front line of the group’s aggressive mergers & acquisitions push in and outside Nigeria.
The new record now makes the company Nigeria’s biggest public company by revenue, confining the previous holder of the crown MTN Nigeria to the pillion seat.
Higher revenue for Access Holdings, whose core business involves lending, rode on the wave of elevated monetary policy rate of the central bank which, reaching 22.75 per cent during the year, gave banks bigger liberty to charge more on loans.
Net interest income,a profitability metric accounting for the difference between how much banks earn from interest-bearing assets and what they incur in borrowing funds, was, at N694.5 billion, nearly double that of the preceding year.
In plus for operating profit as well as credit quality, the corporation pruned the cash set aside to cover problematic loans whose chances of getting repaid have been endangered by recurrent defaults by 29.5 per cent to N139.5 billion.
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Access Holdings, with tentacles in commercial banking, pensions, consumer lending, insurance, and payments, has footprints in at least fifteen markets, mostly in Africa, apart from Nigeria.
The lender reported N628.9 billion in fair value and foreign exchange gain compared to N335.5 billion a year earlier after a slide in the neighbourhood of 70 per cent in the value of the naira boosted its dollar earnings in local currency.
Pre-tax profit stood at N729 billion, advancing from N167.7 billion.
Total comprehensive income came to N1 trillion after adding windfall gains, notably anunrealised foreign currencytranslation income of N481.1 billion, to post-tax profit.
Unrealised foreign currency translation income derives from gains made after converting the transactions of the foreign subsidiaries of a parent company into local currency.
Nigerian banks, a good number of which greatly profited last year from a weaker naira that swelled up their foreign exchange gains on conversion to local currency, will not be able to reward shareholders with a slice of the jackpot after the Central Bankbarredthem this month from using “such FX revaluation gains to pay dividends or meet operating expenses.”
Access Holdings, in a separate statement on Wednesday, announced a final dividend of N1.80 per share having paid N0.30 per unit in interim dividend, meaning a payout of N74.6 billion for the year is on the horizon.
Shares in the lender had risen 2.8 per cent to N23.75 per unit as of 10:48 WAT in Lagos after the news reached the public.
So far this year, Access Holdings has underperformed the NGX Banking Index, which tracks the performance of the banking sector, focusing on the most liquid and the most capitalised stocks. While it has returned -0.22 per cent year-to-date, the latter has yielded 10.7 per cent.
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