Access Bank’s profits rose 52% in the first half of 2023. But it failed to double its profits like its peers.
Access Holdings Plc reported profits of 135 billion yen in the first half of 2023. This represents a 52% jump from the half of 2022, according to the bank’s report. half-yearly accounts. Compared to other Tier 1 banks like First Bank, GTCOAnd Zenith which doubled their profits over the same period, and Tier 2 banks like Fidelity and Stanbic, Access Holdings’ results aren’t exactly impressive. GTCO recorded ₦280 billion in the first half of 2023, in profits compared to ₦77 billion in June 2022. First Bank recorded ₦187 billion, compared to ₦56 billion in June 2022. Zenith Bank recorded ₦291 billion in first half of 2023, as profits of ₦111 billion in June 2022. Fidelity recorded ₦61 billion compared to ₦23 billion in June 2022, while Stanbic recorded ₦67 billion compared to ₦30 billion in June 2022 .
Blessing or curse?
Access Holdings has been on an acquisition spree for over a year now, trying to expand its reach across the continent. In May, the lender received regulatory approval from the Central Bank of Angola to proceed with the purchase of a majority stake in Finibanco Angola. In July, he acquired the sub-Saharan subsidiaries of Standard Chartered Bank for an undisclosed amount. In its balance sheet, these acquisitions appear as a curse and a blessing. Between December 2022 and June 2023, Access Holdings’ total assets and total liabilities jumped 39%. Its total assets stand at N20 trillion as of June 2023, up from N14 trillion as of December 2022, less than six months.
Liabilities follow closely behind, as they currently stand at N19 trillion as of June 2023, up from N13 trillion six months ago. This made the bank vulnerable to credit risks. For example, its loans and advances reached N6.7 trillion in June 2023, compared to N5.1 trillion recorded in December 2022. A note from the bank indicates that directors are confident in their ability to continue to control exposure to credit risk, which may result from both its portfolio of loans and advances and its debt securities.
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The Ghana problem
But that’s not all. Currently, the Ghanaian government is struggling with bankruptcy. for non-payment of billions of dollars he owes international creditors in December. Access Holdings is one of the government’s creditors, with Ghana’s sovereign debt having impacted the bank’s position. “The fair value of Ghana’s sovereign debts on the books of Access Holdings is ₦615.18 billion (December 2022: ₦348.15 billion),” the note in the lender’s financial statements said.
Nonetheless, Access Bank demonstrated growth in its corporate and investment banking businesses which generate the bulk of its revenue, increasing almost double to ₦469 billion in June 2023, from ₦266 billion in June 2022 Its net fee income increased by 59% to N88 billion in June 2023. Likewise, its net interest income increased by 14% in the first half of 2023.
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