ACCESSCORP: Improved yields bolster Q1'24 earnings

Access Holdings Plc (NGSE: ACCESSCORP"”BUY: N41.23) reported PAT growth of over 2x to N159.3 billion with an EPS of N4.4 in its unaudited Q1'24 results. The stellar performance stemmed from complementary growth in interest income (+183.1% to N719.6 billion) and non-interest revenue (+48.0% to N229.1 billion). The strong performance of both revenue streams led to a 131.9% increase in gross earnings to N948.7 billion.

Specifically, interest income advanced on the back of an improved asset yield amidst the higher interest rate environment, accompanied by a 124.9% expansion in the IEA base as the bank increased its investment in government securities. With the momentum in interest income growth trumping the 179.3% surge in interest expense to N443.9 billion, net interest income (NII) also increased by 189.4% to N275.7 billion.

Non-interest revenue (NIR) advanced by 48.0%, driven by an 83.4% rise in fees and commission income to N112.4 billion. Improvement was seen in income from credit-related fees and commissions (+97.4% to N44.4 billion), channels and other E-business income (+61.5% to N33.4 billion) and account maintenance charges and handling commissions (109.9% to N13.8 billion).

Operating expenses rose 86.5% YoY to N279.3 billion (vs. N149.8 billion in Q1'23) due to higher personnel expenses, regulatory costs, professional fees, and IT and e-business expenses. Nonetheless, cost-to-income moderated by 4.57ppts to 55.3% in Q1'24. Elsewhere, impairment charges on loans and advances declined by 4.37%, with the cost of risk (CoR) moderating by 60bps to 0.7% even as gross customer loans and advances almost doubled (+95.5% ) to N9.9 trillion.

The Q1'24 financial result translated to an annualised ROE of 26.9% (vs. 32.6% in Q1'23) and an annualised ROA of 2.2% (vs. 2.5% in Q1'23). 

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