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ACCESS HOLDINGS PLC Q1'22 Earnings Release - Q1 earnings soar 33% y/y on balance sheet growth

Q1 earnings soar 33% y/y on balance sheet growth                                                       

In ACCESSCORP’s recently released its Q1’22 results, the company reported 33% y/y growth in Gross Earnings to ₦296 billion, 12% above our expectation (₦261 billion). The bank reported 21% y/y growth in Interest Income to ₦174 billion (Vetiva: ₦172 billion), thanks to improved income from loans to customers, as well as higher returns on Fixed Income securities. More impressively, Non-Interest Revenue (NIR) grew 55% y/y to ₦109 billion (Vetiva: ₦89 billion), due to significant growth across several line items including fees and commissions (+45% y/y), net FX and trading income (+46% y/y) and others.                                                 

Despite the impressive income growth, Net Interest Income came in 7% lower y/y at ₦87 billion due to a 73% y/y expansion in Interest Expense to ₦86 billion, after interest paid on deposits more than doubled y/y. Part of this can be attributed to the bank’s impressive 32% y/y deposit growth reported in Q1, with a balance of ₦7.5 trillion, coming in 8% higher than the FY’21 figure. This, coupled with a 40bps rise in cost of funds, resulted in the high Interest Expense bill.                                                    

Cost-wise, Loan loss provisions grew by only 9% y/y to ₦13.7 billion (Vetiva: ₦17 billion), while Opex expanded faster than expected at 28% y/y to ₦117 billion (Vetiva: ₦100 billion), driven by a 27% y/y rise in AMCON charges and a surprising 46% y/y jump in staff costs, specifically wages and salaries. Ultimately, the bank reported an 8% y/y growth in PBT to ₦65 billion and 9% higher PAT of ₦57 billion.