LAGOS, MAY 8, 2018 – Access Bank Plc’s exposure to the energy sector rose slightly in 2017, as its loans and advances to oil and gas firms, power and energy companies appreciated by 4.85 per cent to N545.308 billion as at the end of the year. According to data in its 2017 Annual Report and Account, Access Bank’s exposure to the energy sector in 2017 represented an improvement of N25.225 billion from N520.083 billion recorded in 2016.
The rise in the bank’s lending to the energy sector despite the volatility in the global energy landscape, may be linked to its deployment of unique risk management principles which it said came into effect in 2017. Specifically, in the financial report, the bank said various risk management initiatives came to fruition during the period which added to the range of risk management tools that assisted it in managing risks over the period.
In addition, the bank said it, “developed in-house macroeconomic and financial models for Probability of Default, Loss Given Default, stress testing and loan grading; and also developed models for scenario analysis to better capture and anticipate evolving macroeconomic dynamics and impact at industry, sectoral and obligor levels.”
Giving a breakdown of the loans to customers on a sector basis as at December 31, 2018, the report disclosed that gross loans and advances to downstream oil and gas companies dipped by 19.3 per cent to N125.782 billion, compared to N155.87 billion. The decline in its loans and advances to downstream operators may be as a result of the stoppage of fuel importation by oil marketers, early 2017, leaving the Nigerian National Petroleum Corporation, NNPC, as the sole importer of the commodity.
Furthermore, Access Bank’s gross loans and advances to oil and gas services companies dipped by 20.87 per cent from N204.209 billion to N246.82 billion; while advances to the upstream oil and gas companies also appreciated by 18.45 per cent to N124.628 billion from N105.212 billion recorded in 2016. Access Bank’s exposure to crude oil refining companies stood at N36.002 billion as at 2017, rising by 7.84 per cent from N33.386 billion recorded in 2016; while loans and advances to power and energy companies declined by 43.59 per cent to N12.076 billion from N21.406 billion in 2016.
