THUR MAY 02 2024-theGBJournal| Access Holdings Plc (ACCESSCORP) reported a profit before tax growth of 148.0% y/y to N202.74 billion, a 121.8% y/y growth in profit-after-tax to N159.29 billion, amid the higher income tax expense (+337.2% y/y) in the period.
The earnings was reported in ACCESSCORP’s Q1-24 unaudited financials published after trading hours on Tuesday (30 April).
The report also revealed a stellar diluted EPS growth (+118.6% y/y to N4.35 I Q1-23: N1.99).
The rise in the Holdco’s earnings was supported mainly by the strong growth in its core (+183.1% y/y) income amid a rise in non-core (+47.9% y/y) income.
The group’s interest income grew by 183.1% y/y to NGN719.60 billion in Q1-24, as all major contributory lines recorded increases – investment securities (+255.4% y/y), loans and advances to customers (+125.2% y/y), loans and advances to banks (+292.4% y/y) and cash and bank balances with banks (+478.0% y/y).
Analysts at Cordros Research attribute the higher core income to growth in investment securities (YTD: +142.5% y/y to N8.52 trillion) and elevated interest rates in the fixed-income market.
Sequentially, interest expense advanced by 179.3% y/y to N443.88 billion, driven by the high interest rate environment.
Notably, the group incurred higher costs on deposits from financial institutions (+364.7% y/y), deposits from customers (+108.4% y/y), and other borrowings – interest-bearing borrowings (+102.7% y/y) and debt securities issued (+352.5% y/y) – in the period under review.
Consequently, the group’s net interest income settled 189.4% y/y higher to NGN275.72 billion after accounting for credit impairment charges of N22.79 billion (+21.8% y/y).
Similarly, the group’s non-interest income advanced by 47.9% y/y to NGN229.12 billion, primarily driven by FX revaluation gains (+91.1% y/y) and net fees & commissions income (+91.4% y/y) outweighing the losses on investment securities (+13.3x y/y to N95.76 billion), triggered by the loss on non-hedging derivatives (N288.50 billion | Q1-23: N26.90 billion) amid gains on equity investments (N111.98 billion | Q1-23: nil).
Further in, operating expenses spiked by 86.5% y/y to N279.31 billion, due to the combined impact of higher regulatory costs and inflationary pressures in the review period.
For clarity, the group incurred higher costs on personnel expenses (+137.9% y/y), AMCON levy (+68.4% y/y), NDIC premium (+27.2% y/y) and other expenses (+75.6% y/y).
Nonetheless, the higher rate of increase in income relative to expenses improved the Holdco’s cost-to-income ratio (after accounting for LLEs) to 57.9% (from 64.7% in Q1-23).
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