Access Holdings Plc, Nigeria’s largest bank by total assets, reported a pre-tax profit of N146.1 billion in the second quarter of 2024. This represents a notable performance for the bank, which has seen significant growth across its major income lines.
Combined with the first-quarter pre-tax profit of N202.7 billion, Access Holdings’ half-year pre-tax profit now stands at N348.9 billion, nearly double the N167.6 billion recorded in the same period last year.
Key Financial Highlights (Q2 2024 vs. Q2 2023)
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- Interest Income: N752.5 billion (+113%)
- Net Interest Income: N237.6 billion (+84.3%)
- Loan Impairments: N99.9 billion (+441.2%)
- Operating Income: N585.4 billion (+132.5%)
- Operating Expenses: N439.7 billion (+164.7%)
- Pre-tax Profits: N146.1 billion (+69.97%)
- Loans and Advances: N12.2 trillion (+45%)
- Total Deposits: N27.3 trillion (+83.1%)
- Total Assets: N36.5 trillion (+75.5%)
- Net Assets: N2.72 trillion (+65.3%)
- Earnings Per Share (EPS): N7.61
- Dividend: 45 kobo per share
Revenue Growth
Access Holdings’ second-quarter results reveal strong year-on-year growth, with interest income surging to N1.4 trillion in the first half of 2024. Loans and customer advances contributed N691.8 billion, while loans to other banks added N86.6 billion. Investment securities generated the remaining interest income.
However, the bank also incurred substantial interest expenses. Deposits from other financial institutions resulted in N419.2 billion in interest costs, while deposits from customers amounted to N411.2 billion. Despite this, Access Holdings’ operating income grew by 132.5% year-on-year.
Fees and commissions contributed N250.9 billion in the first half, driven by credit-related fees, e-business income, and account maintenance charges. The bank’s e-banking expenses, meanwhile, totaled N37 billion.
The bank experienced a significant rise in operating expenses, primarily due to surges in IT and e-business expenses, which grew by 265% to N111.2 billion, and personnel expenses, which surged to N158.8 billion (+143.9%). This increase can be attributed to a rise in staff headcount, promotions, and more managerial employees.
Access Holdings also faced a sharp rise in travel costs, which more than doubled to N24.5 billion, and its AMCON surcharge rose to N111.2 billion from N68.8 billion. Overall, the bank’s operating expenses climbed by 128%, reaching N512 billion.
Subsidiary Performance
Among Access Holdings’ subsidiaries, Access Bank UK and Access Bank Ghana were standout performers, contributing N111.1 billion and N40 billion in pre-tax profits, respectively. On the other hand, Access Bank South Africa and Kenya posted pre-tax losses of N7.6 billion and N3 billion, respectively.
Hydrogen Payment Services, the bank’s new fintech subsidiary, reported a pre-tax profit of N238 million from N3.1 billion in revenue, a growth from N161 million in the same period last year. Newly acquired Access Pension and ARM Pension contributed revenues of N7.1 billion and N8 billion, respectively, while Access Golf reported N1.9 billion in revenue.
Fidelity Bank Soars Amid Bullish Market
Meanwhile, Fidelity Bank Plc has been riding a wave of bullish sentiment on the Nigerian stock market. By the third week of September, its share price surged past the N13.00 mark, gaining over 20% month-to-date.
This rally comes on the heels of the bank’s hybrid rights issue and Initial Public Offering (IPO) launched in June 2024. Fidelity Bank raised a total of N127.1 billion through a combination of 10 billion ordinary shares at N9.75 for the public and 3.2 billion shares at N9.25 for existing shareholders. Market enthusiasm for the offer was so strong that it was extended by an additional 8.2 billion shares.
After a brief period of price consolidation between June and August, the stock saw renewed momentum, with weekly volumes reaching 27 million shares by mid-September. Fidelity Bank’s share price has risen more than 680% since August 2018, when it traded below N2, marking a remarkable long-term bullish trend.
In a message to investors, Fidelity Bank Managing Director Nneka Onyeali-Ikpe expressed satisfaction with the capital raise, stating, “We have met and surpassed the capital-raise target we set for ourselves in the first phase of our exercise,” while praising investor confidence in the bank.
The performances of Access Holdings Plc and Fidelity Bank reflect the broader resilience of Nigerian banks, despite the challenging economic environment. Access Holdings’ strong revenue growth, despite rising costs and impairments, demonstrates the robustness of its diversified business model. Meanwhile, Fidelity Bank’s successful capital raise and subsequent share price surge point to continued investor confidence in the sector.
Amid economic headwinds, Nigerian banks have shown remarkable adaptability, with others such as Zenith Bank and GTCO declaring huge profits for the half year 2024.