Access Bank Plc (NSE Ticker: ACCESS) became the last of the tier 1 banks to release its consolidated and separate financial statement for the period ended 30 June, 2020, to the Nigerian Stock Exchange and the investing public. The financial statement was released after trading hours on Thursday 3rd September, 2020.
The Board of Directors proposed an interim dividend of 25 kobo per ordinary share of 50 kobo each (HY 2019: 25 kobo). Withholding tax will be deducted at the time of payment.
- Read also; Fidelity Bank Plc rakes in N105.7 billion gross earnings in H1 2020
- Zenith Bank Plc declares 30 kobo interim dividend, reports N103.826 billion Profit in H1 2020
In the course of the trading session on Friday 4th September, 2020, ACCESS released a corporate action announcement regarding the dividend proposal;
Highlights of the dividend corporate action;
- Period ended: 30th June, 2020
- Proposed Dividend: An interim dividend of 25 kobo
- Qualification date: September 17, 2020
- Payment Date: On September 28, 2020, dividends will be paid electronically to shareholders whose names appear on the Register of Members as at September 17, 2020 and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their Bank accounts.
Analysis of the report: Income Statement
The bank reported a 6.25% decline in the interest income calculated using effective interest rate, declining from N226.124 billion in H1 2019 to N211.990 billion in H1 2020. There was also a 25.74% decline in the Interest income on financial assets at FVTPL, from N46.771 in H1 2019 billion to N34.731 billion in H1 2020.
The bank recorded double digit growth in the other income segments; Fee and commission income grew by 23.69% from N41.858 billion to N51.774 billion, while other operating income grew by 21.42% from N24.412 billion to N29.642 billion.
The bank reported a 16.02% increase in personnel expenses, it went from N31.245 billion in H1 2019, to N36.251 billion in H1 2020. This can be attributed to an increase in wages and salaries.
Despite a reduction of the average number of persons other than directors, in employment at the Group level during the period when compared with the same period in 2019, there was a N4.566 billion increase in the wages and salaries.
A review of the “note” contained in the financial statement shows that the average number of persons other than directors employed by the Group decreased from 7,373 in H1 2019 to 6,617 in H1 2020. While the persons in managerial positions decreased from 350 to 344, the number of other staff decreased from 7,023 to 6,273.
As at 31 December, 2019, there were 6,898 persons on average that are not directors, in employment at the Group.
There were marginal changes in the profit before and after tax. While the profit before tax increased by 1.84% from N72.964 billion to N74.306, the profit after tax for the period decreased by 1.36% from N61.873 billion to N61.034 billion.
With a Return on Average Equity (ROaE) of 9.56%, and an Earnings per Share of N1.73, ACCESS is still some distance behind the leading banks; GUARANTY and ZENITHBANK. However, it is also trading significantly lower than the aforementioned banks.
Analysis of the report: Statement of Financial Position
A review of the balance sheet shows small changes across most of the items on it;
- Total assets increased by only 8.73% to N7.766 trillion
- Deposits from customers increased by 8.73% to N4.667 trillion
- Total liabilities increased by 8.56% to N7.096 trillion
- Total equity increased by 10.49% to N670.361 billion
Analysis of the result: Statements of Cash Flows
An analysis of the Cash flow statements shows that while the bank began the period with a N1.226 trillion cash and equivalents, on net it used N625.105 billion in various business activities in the period; Operating, Investing and Financing.
At the end of the period, the bank had N612.310 billion in cash and cash equivalents.
Table 1: Financial Highlights
About the Company
Access Bank Plc (“the Bank”) is a bank domiciled in Nigeria. The address of the Bank’s registered office is No 14/15, Prince Alaba Oniru Road, Oniru, Lagos (formerly Plot 999c, Danmole Street, off Adeola Odeku/Idejo Street, Victoria Island, Lagos).
The Group is primarily involved in investment, corporate, commercial and retail banking. The Bank is listed on the Nigerian Stock Exchange.
ACCESS have 35,545,225,622 outstanding shares with, retail investors holding 25.60% of it, while domestic institutional investors hold 67.59%. Foreign Institutional Investors hold 6.60% and Government related entities hold 0.21%.
According to the register of members as at 30 June 2020, only Stanbic Nominees Nigeria Limited holds more that 5% of the issued share capital of the Bank; holding 4,780,911,687, representing 13.45%.
Price Movement
The share price of ACCESS has recovered from the low prices it dropped to at the onset of the Covid-19 pandemic, YTD, the stock price is down by 36.00%, and down by 7.25% over the past year.
Over 5 Years, the stock is up by 32.78%, and down 33.33% over the last 3 years.
The 52 week high and low prices are N12.00 and N5.30 respectively.
Source: Mytradebook
Analyst’s view
In our previous stock pick for the week, we rated ACCESS a BUY, and we will be reviewing this rating in next week’s stock pick.
At the last closing price of N6.40, ACCESS is now trading at 2.21x its earning, a very attractive ratio for investors.
Written by;
Nnamdi M.
