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Just in: Access Holdings Plc hits EPS growth of 48.4% y/y to NGN3.74/s

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Access Holdings Plc (ACCESSCORP) released its audited H1-23 financials recently, reporting an EPS growth of 48.4% y/y to NGN3.74/s (H1-22: NGN2.52/s), supported by growth across its core (+63.4% y/y) and non-core (+53.0% y/y) income lines. Peculiarly, ACCESSCORP recorded the slowest earnings expansion rate among its tier 1 peers – UBA (+453.0% y/y), GTCO (+268.2% y/y), FBNH (+224.8% y/y), and ZENITH (+161.7% y/y). The board has proposed an interim dividend of NGN0.30/s (H1-22: NGN0.20/s), which equates to a dividend yield of 1.9% based on the last closing price of NGN15.55/s (25 September).

The Holdco recorded a 63.0% y/y increase in its interest income to NGN606.84 billion, driven majorly by the combined impact of (1) elevated yields in the fixed-income market and (2) the growth in the group’s earnings assets (+38.5% YTD to NGN14.24 trillion) in the period. In nominal terms, the holdco recorded increased income from loans & advances to customers (+33.8% y/y to NGN318.53 billion), investment securities (+113.8% y/y to NGN259.33 billion), loans & advances to banks (+178.2% y/y to NGN22.51 billion) and cash and balances with banks (+33.9% y/y to NGN6.47 billion).

Interest expenses grew faster by 118.9% y/y to NGN382.60 billion, triggered by the higher cost of deposits from customers (+91.1% y/y to NGN207.57 billion) and financial institutions (+245.3% y/y to NGN115.55 billion), following the elevated interest rate in the environment amid the deteriorating CASA mix (H1-23: 60.7% | 2022FY: 62.6%). Likewise, the group recorded higher costs on debt securities (+77.4% y/y to NGN20.06 billion) and interest-bearing borrowings (+67.5% y/y to NGN38.64 billion). After accounting for credit impairment charges (+0.8% y/y to NGN37.18 billion), net interest income (ex-LLE) settled higher by 16.4% y/y to NGN187.06 billion.

Furthermore, non-interest income (NII) expanded by 53.0% y/y to NGN296.48 billion, spurred by gains in fees and commission (+58.8% y/y to NGN88.03 billion) and FX revaluation (+362.4% y/y to NGN244.34 billion). The preceding was sufficient to offset the losses incurred on its trading books – investment securities (NGN37.06 billion) and FX (NGN15.22 billion).

Elsewhere, operating expenses increased by 23.1% y/y to NGN315.94 billion, reflecting the heightened inflationary pressures and rise in regulatory costs. In terms of contributory items, the group recorded an increment in NDIC premium (+45.5% y/y to NGN16.16 billion), AMCON levy (+30.5% y/y to NGN68.81 billion), depreciation & amortization (+20.7% y/y to NGN26.18 billion) and personnel expenses (+11.8% y/y to NGN65.13 billion). Following the faster operating income growth (+36.4% y/y) relative to OPEX, the cost-to-income ratio  (ex-LLE) improved at 65.3% in H1-23 (vs 72.4% in H1-22).

To sum up, profit before tax grew by 71.4% y/y to NGN167.60 billion. Meanwhile, following a surge in income tax expense (+255.3% y/y), profit after tax settled 52.6% y/y higher at NGN135.44 billion.

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