The Merger of Access Bank Plc (NSE: ACCESS) and Diamond Bank Plc which made ACCESS the biggest bank in Nigeria by customer base is beginning to bear fruits.
The Bank in its financial statements for the period ended 30th September 2020, reported a Profit After Tax of N102.30 billion, almost N5.00 billion more than the N97.50 billion reported for the entire 2019 financial year.
The profit after tax of ACCESS is getting closer and closer to those reported by the front runners; ZENITHBANK and GUARANTY.
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Analysis of the report: Income Statement
The bank report N317.67 billion Interest Income calculated using effective interest rate, 9.03% lower than the N349.19 billion reported in the 9 months ended 30 September 2019.
N236.611 billion of the Interest Income calculated using effective rate was from Loans and advances to customers, representing 74.5% of all the income.
The Fees and commission income component of the bank’s revenue increased by 31.37% to N87.883 billion (9M 2019: N66.895 billion).
The jump in the fees and commission income can be attributed to a significant increase the one of its revenue components; Channels and Other E-business income. This increased from N18.957 billion reported in 2019 to N38.798 billion. It contributed 44% to the total fees and commission income.
The Credit related fees and commissions component increased from N24.406 billion to N28.358 billion, making it the second biggest contributor, while the Account maintenance charge and handling commission increased marginally to N10.746 billion.
Personnel expenses increased marginally by 4.38% to N57.094 billion, from N54.699 billion. The Bank paid N53.822 billion in wages to its employees, slightly higher than the N51.953 billion used for the same purpose in the same period in 2019.
The Profit Before Tax (PBT) grew by 15.69%, to N116.622 billion from N100.802 billion reported in the same period in 2019.
The Access Bank Group operates in three geographical regions, and the contribution of each of these regions to its PBT is as follows;
- Nigeria: N74.742 billion, representing 64% of total PBT
- Rest of Africa: N24.004 billion, representing 20.5% of total PBT
- Europe: N17.875 billion, representing 15.3% of total PBT
In recent times, ACCESS has been making acquisitions across the African continent as it positions to be the continental leader in the banking industry. A review of the companies Income statement shows that while the bank earned N10.267 billion as PBT for the period ended 30 September 2019, it increased to N24.004 billion in the same period in 2020.
The Profit After Tax (PAT) increased by 15.68% to N102.300 billion from N88.437 billion.
Analysis of the report: Statement of Financial Position (Balance Sheet)
While the Cash & balances with banks decreased by marginally by 0.80%, all the major parts of a balance were reported to have increase in the period in review.
- Total Assets increased by 10.94% to N7.924 trillion
- Total Liabilities increase by 10.84% to N7.245 billion
- Total Shareholders Equity increased 11.99% ro N679.36 million
Analysis of the report: Statements of Cash Flows
The Bank’s cash flow as at 30 September was positive, as it reported a Cash and cash equivalents of N717.253.659 billion (31 Dec. 2019: N723.064 billion).
- OPERATING ACTIVITIES: N395.929 billion was used in operating activities, significantly higher than N19.777 billion used as at 31 Dec. 2020.
- INVESTING ACTIVITIES: N69.933 billion was was used in investing activities, more than N123.48 billion used as at 31st Dec. 2019.
- FINANCING ACTIVITIES: N77.569 billion was generated from financing activities driven by near interest bearing loans.
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%.
Share Price Movement
The share price of ACCESS has recovered from the low prices it dropped to at the onset of the Covid-19 pandemic.
Its 52 week low price is N5.30 and its 52 week high price is N12.00. It closed at N8.60 at the end of trading on Friday on the Nigerian Stock Exchange.
Investogist Analysts have a HOLD rating on the stock.
By; Nnamdi M