UPDATED: Access Holdings’ quarterly profit jumps 15%

First quarter profits at Access Holdings, Nigeria’s biggest public company by assets, increased by 14.7 per cent year on year, a sharp slide from a growth rate of 121.8 per cent achieved in the same period of last year, according to its latest earnings report. Revenue increased by 41.9 per cent to N1.4 trillion within the period.

Interest income increased by 73.4 per cent to N980.7 billion, powered by a prolonged, industry-wide boom that still allows lenders to grant loans at high interest rates, despite the central bank’s February decision to press the brakes on rates.

The interest expense of Access Holdings, which has tentacles in commercial banking, pensions, payments and insurance brokerage, leapt 71.3 per cent to N760.5 billion, crowding out income.

Here, the pressure point was the costs incurred from the interest it paid to savers, which more than doubled to N447.2 billion.

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Likewise, the interest paid on deposits from financial institutions rose by 37.2 per cent to N249.7 billion.

That happened as the corporation’s profound hunger for growth, which has fuelled several banking acquisitions across Africa in recent years, continues to drive up costs.

Roosevelt Ogbonna, the chief executive of the commercial banking arm Access Bank, told a Lagos media conference in October that 70 per cent of the cash used for those buyouts came from shareholders’ fund.

Three of the corporation’s African subsidiaries – Access Bank South Africa, Kenya and Mozambique – remained the problem children of the group as their loss-making spell continued, negatively diluting profits.

READ ALSO: Access Holdings records 88% growth in gross earnings to N4.878trn

Net fees and commission income surged 68.4 per cent to N146.2 billion, with credit-related fees driving the charge.

Pre-tax profit rose to N222.7 billion, up from N202.7 billion. Income tax expenses declined by 7.9 per cent, softening the pressure on after-tax profit, which climbed to N182.8 billion from N159.3 billion a year earlier.

Last December, Access Bank announced it had bumped up its share capital to N600 billion after raising fresh cash through a share sale to existing shareholders to meet the Central Bank of Nigeria’s new minimum requirements for lenders.

The rule raised the minimum share capital for lenders like Access Bank, which holds international banking permits, to N500 billion, ten times higher than the current level, expecting banks to comply by March 2026.