Access published its own report card and admitted its failure
Access Holdings Plc held its nine-month 2026 earnings call on 5 November and did something rare in Nigerian banking: it published its own report card and admitted it was failing it. Profit before tax of N667.36bn, up 8.3%, and profit after tax of N474.17bn, up 5.9%, look respectable on the surface, but the closing slide of the presentation told the real story. Against its original FY2026 guidance, four of seven measures are now expected to miss. That is not a rounding error. That is a management team conceding, mid-year, that its scale-to-value agenda is moving slower than it promised. The question is no longer whether Access is big. It is. The question is why bigness is not translating into efficiency, returns, and dividends at the pace its peers are delivering, and who bears the cost of that lethargy.
The scorecard itself is the indictment. Return on average equity came in at 14.1%, a level that barely beats inflation and sits well below the cost of equity in Nigeria. In the same nine-month period, Stanbic IBTC reported a return on equity of 38.67%, profit growth of 33%, and a cost-to-income ratio of 34.90%. Stanbic is smaller, but it is compounding. Access is larger, but it is diluting. Net interest margin at 4.4% tells a similar story of a bank struggling to price risk and manage funding. Management blamed wholesale-funded international subsidiaries, reinvestment at lower yields, and cash held for large transaction mandates. That explanation is honest, but it is also an admission that the international expansion that was supposed to diversify earnings is now dragging margins down. Cost-to-income at 63.1% is perhaps the most damning number of all. For every N100 Access earns, it spends N63.10 to earn it, against guidance of 50% to 55% and against peers who operate in the 30s and 40s. Group operating expenses rose 11.8% to N1.30trn, driven by staff costs and amortisation from integrating businesses acquired in 2025, which management described as non-recurring. Shareholders have heard that word before. Every acquisition brings non-recurring integration costs, and when acquisitions never stop, non-recurring becomes permanent. The one bright spot was cost of risk at 0.51%, within range, with impairments down 73.5% and core income, meaning interest plus fees, rising to 95.2% of Bank gross earnings from 90.9%. Credit discipline has improved, but credit discipline alone does not create value if costs eat the benefit.
The lethargy has structural roots, and the first is acquisition indigestion. Access built its empire by acquisition across Africa, in the UK, in France, and through mergers at home. Each deal added assets, branches, staff, systems, and culture, and integration is expensive and slow. The 11.8% rise in operating expenses is not an accident. It is the bill for scale. Peers took a different path. Stanbic grew equity 27.26% organically in nine months without asking shareholders for new money, and kept cost-to-income at 34.90% by growing income 24.82% while costs grew only 14.30%. Access grew by buying. Stanbic grew by disciplining. The market is now pricing the difference. The second root is the international drag itself. Access Bank Managing Director Roosevelt Ogbonna admitted the margin problem is partly structural, rooted in wholesale-funded international subsidiaries that borrow expensive wholesale money, lend at lower yields in competitive markets, and hold cash for mandates that earn little. This is the paradox of Access’s strategy. It expanded abroad to escape Nigeria’s volatility, but it imported a different volatility: low-margin, high-cost foreign operations that dilute Group returns. While Stanbic used its parent, Standard Bank Group, to win high-fee trade finance where risk is shared, Access used its own balance sheet to fund foreign subsidiaries that now need capital recalls to fix a regulatory breach.
That regulatory breach is the third root, and it is now consuming management attention. Slide 26 laid bare the cost of that expansion. The Bank’s investment in subsidiaries is N446.6bn, or 19.29% of shareholders’ funds, against a 10% limit under Section 19(8)(c) of BOFIA. To comply by March 2027, the carrying value must fall by about N215bn, assuming shareholders’ funds stay at about N2.32trn. Management’s three-path plan, recalls in seven markets, minority stake sales in five countries, and a new global holding structure, is credible, but it is also a distraction. Instead of management focusing on cutting cost-to-income from 63.1% to 50%, it is spending time negotiating recalls, seeking shareholder approvals in seven markets and regulatory approvals in four, and selling 7.44% of Ghana as a first step. Capital recalls do not create value. They merely fix a breach that should not have happened. Section 7.1 of the CBN holding company guidelines is now resolved, with HoldCo paid-up capital of N616.02bn exceeding subsidiaries’ combined N608.74bn, but BOFIA remains. Until it is resolved, dividends remain hostage.
Put Access side-by-side with Stanbic in 9M 2026 and the gap becomes stark. Profit growth was 5.9% for Access against 33.0% for Stanbic. Return on equity was 14.1% against 38.67%. Cost-to-income was 63.1% against 34.90%. Both faced margin pressure, but Stanbic offset it with trading and fees that grew 109.86% in non-interest income, while Access grew core income to 95.2% but still could not lift margin above 4.4%. Stanbic avoided danger by refusing to lend aggressively when rates were high, keeping impairment at just N507m, 0.02% of loans. Access also improved impairments, but its cost base meant the benefit was swallowed. The peer comparison is not about size. Access is Nigeria’s largest bank by assets. It is about conversion: turning scale into returns. Stanbic converts. Access accumulates.
The impact of that lethargy falls first on shareholders, and most directly through the dividend drought. The H1 2025 interim dividend was held back by Section 7.1. The FY2025 dividend was held back by BOFIA. Now management says dividends would be expected once compliant, subject to Board and CBN approval, but will not guide on payout ratio. Ogbonna confirmed a residual dividend policy. For a shareholder, that means you funded the expansion through rights issues and retained earnings, you watched return on equity fall to 14.1%, and you have not been paid. The promise of scale-to-value has become scale-without-dividend. Customers also pay, because a bank with 63.1% cost-to-income cannot offer the cheapest loans or the highest deposit rates. It must charge more to cover its costs. Retail and SME customers in Nigeria, already facing lending rates around 23.75% as seen in related-party loans, bear the cost of a bloated cost structure, and fintechs like Opay and Moniepoint are exploiting exactly this gap, taking payments and deposits because they operate at a fraction of Access’s cost. Staff feel it too, through integration fatigue. When a bank is constantly acquiring, staff face restructuring, system changes, and cultural clashes. The best talent leaves, and the remaining talent manages integration, not innovation. Regulators are also drawn in, forced to monitor quarterly recalls, approvals in seven markets, and minority sales, spending supervisory time on fixing a structure rather than on supervising risk.
To its credit, Access deserves praise for disclosure, and that should not be lost in the criticism. Publishing a self-assessment, putting the 19.29% ratio in black and white, disclosing directors’ interests under Section 303 of CAMA 2020, and quantifying related-party loans of N1.26bn at 30 June 2026 at arm’s length, are acts of transparency that peers should copy. Proshare is right to note that disclosure discipline has strengthened its standing. But disclosure without delivery is only half the story. A bank that tells you it is missing four of seven targets is more honest than one that hides it, but it is still missing four of seven targets.
What Access needs now is not another acquisition, but a pause. It must prove cost-to-income can fall, not by promising FY2027 benefits, but by showing quarterly drops in 2026, with the perpetual bond decision before 7 January 2027 serving as a test of funding discipline. It must close the BOFIA gap on time, with the October recall as a start, but three more in November, two before year-end, and one in early 2027 needing to land, because any slip pushes dividend resumption further. It must also decide what its international business is for. If foreign subsidiaries are margin-dilutive and capital-hungry, they should be shrunk, sold, or re-priced, because scale for its own sake is not value. Access Holdings has moved from building scale to accounting for it. That is progress. But accounting is not delivering. Until return on equity rises, cost-to-income falls to the 50 to 55% range, and dividends resume, shareholders will rightly ask: if scale is so valuable, why does it feel so lethargic? The next markers, November recalls, the January bond call, and the FY2026 audited accounts, will tell whether this call was a turning point, or just a more honest description of drift.
