ACCESS HOLDINGS PLC: Relentless pursuit of the North Star

FY’22 drew the curtain on ACCESSCORP’s five-year strategy, centred on strengthening its global franchise to take advantage of trade and intra- African payments opportunities. This charter culminated in geographical expansions, digital transformation, and a HoldCo restructuring. While the Group’s average ROE (16.2%) over this strategic window lagged the tier-1 print (18.0%), we are encouraged by the material shift in PBT contribution from the Rest of Africa segment to 64.2% in H1’22 (vs FY’21: 23.0%). This possibly indicates maturing gains from regional diversification and better guardrails against macroeconomic volatility in FY’23 and beyond.
While we await ACCESSCORP’s new strategy, management is likely to seek to maximise its landmark strides, conclude product roll-outs, and leverage intra-entity synergies. While we note long-term PBT potential from the nascent payments and insurance brokerage businesses, we assess the consumer lending and pension fund segments to be more strategically and commercially viable in FY’23. In particular, the consumer lending business, aided by digitalized channel support, could ease NIM pressures. While we note that this segment could be characterized by greater risk exposures, but we are encouraged by Group’s track record of robust credit risk management evinced by the treatment of legacy risk assets inherited from Diamond Bank.
Elsewhere, ACCESSCORP has demonstrated a clear desire to scale in the pension space with the recent acquisitions of First Guarantee Pension Ltd and Sigma Pension Ltd in 2022. With an AUM of N7xx billion, the Group aims to leverage a superior distribution reach, capital markets expertise, and advanced enterprise technology to boost returns. In FY’23, we forecast a c.3.0% contribution from the PFA to HoldCo PBT.
In all, we remain positive on ACCESSCORP, projecting an 18.2% and 9.8% growth in earnings for FY’23 and FY’24. We leave our 12-month target price (TP) unchanged at N11.97 and retain our BUY rating.

Market Cap (N’bn) 318.13

Last close price (N) 8.95

52-week high-low price (N) 10.60/ 7.50

Avg 3M daily volume (mn) 21.29

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