By Audrey Lotechukwu
FRI 30 APRIL, 2021-theGBJournal-Access Bank Plc published its First Quarter ended 31 March 2021 earnings report Thursday, delivering strong results despite the challenging macroeconomic and regulatory environment.
‘’This shows the strong capacity of our business to generate sustainable earnings on the strength of our balance sheet, diverse revenue streams and our dedicated people,’’ said Herbert Wigwe, Chief Executive Officer.
–Gross Earnings rose 6% y/y to ₦222.1bn in Q1 2021, (Q1 2020: ₦209.8bn), with interest and non-interest income contributing 65% and 35% respectively.
-Profit Before Tax (PBT) for the period rose by 30% y/y to ₦60.1bn (Q1 2020: ₦46.2bn). Profit After Tax (PAT) also grew by 28% y/y to ₦52.6bn from ₦40.9bn in Q1 2020, on the back of a 13% y/y growth in Operating Income and a 16% y/y reduction in Interest Expense which offsets the rise in Impairment Charges.
-The assets base of the Group remained strong and resilient with Total Assets of ₦9.05trn in March 2021, a growth of 4% YTD from ₦8.68trn in December 2020. Net Loans and Advances totaled ₦3.64trn as at March 2021 (December 2020: ₦3.61trn).
–Non-Performing loans (NPL) ratio stood at 4.0% as at March 2021 (December 2020: 4.3%), on the back of an intensified recovery drive within the period.
The Group recorded a slight improvement in gross earnings by 6% y/y to ₦222.1bn (Q1 2020: ₦209.8bn), however, the bottom line saw a significant increase of 30% y/y to ₦60.1bn (Q1 2020: ₦46.3bn), on the strength of a 30% y/y growth in Net Interest Income. As a result of effective implementation of our cost reduction strategy, Operating Expenses remained flat y/y, despite the inflationary environment and increased regulatory cost.
The Bank’s retail banking business also showed steady growth with a 112% y/y increase in revenue to ₦57.5bn (Q1 2020: ₦27.1bn), and a 941,631 new customer sign-on via financial inclusion drive during the quarter.
This improvement is evidenced by the consistent and robust savings account growth to ₦1.36trn (4% YTD), leading to a significant reduction in our Cost of Funds. With the increased adoption of its digital channels and the growing customer base, the Bank recorded a 29% y/y growth in USSD Transaction value and 40% y/y increase in Mobile and Internet Banking Transaction Value.
In line with its risk appetite and efficient risk management, the asset quality of the Bank continued to improve as guided with NPL Ratio of 4.0% (Dec. 2020 4.3%), as it intensified its recovery efforts. Likewise, loan portfolio was expanded ‘’cautiously’’ as reflected by the marginal growth in the net loans and advances to ₦3.65trn YTD (Dec 2020: ₦3.61trn).
The Bank also maintained robust capital and liquidity positions, well above regulatory levels with a Capital Adequacy Ratio of 22.2% and a liquidity ratio of 48.3%, according to the Chief Executive, ‘’positioning us to support our customers across various markets and adequately execute our expansion strategy.’’
‘’In furtherance of our vision to be the World’s most respected African Bank and Africa’s payment gateway, we remain committed to a disciplined and thoughtful expansion strategy. Leveraging the African Continental Free Trade Agreement (AfCFTA), we will focus on key markets to drive outside Africa and intra-Africa trade. In alignment with our objectives, we recently announced our intention to acquire a majority shareholding in African Banking Corporation of Botswana Limited to further strengthen our Southern African footprint,’’ Wigwe said.
In its outlook, the Bank said they are poised for strong earnings growth fuelled by their retail momentum, robust balance sheet, and operational efficiency.