Access Holdings posts N146.1 billion pre-tax profit in Q2 2024, reports N412 billion as “unrealized” FX gains

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 is according to information contained in the company’s half-year audited filings published on the website of the NGX.

Combined with the first-quarter pre-tax profit of N202.7 billion, Access Holdings’ half-year profit now stands at N348.9 billion, compared to N167.6 billion reported during the same period last year.

Access Holdings’ second-quarter results reveal year-on-year growth across all major income lines. However, when compared to the previous quarter, there was a general dip in performance during the second quarter.

Key highlights 2024 Q2 vs 2023 Q2
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%
EPS (YTD): N7.61
Dividend: 45 kobo
Commentary
Revenue
Despite reporting a pre-tax profit of N348.9 billion, the corporation also reported a total comprehensive income of N646.34 billion after including an “unrealized foreign currency translation difference” of N412.8 billion.

A cursory review of its half-year results shows interest income of N1.4 trillion, out of which N691.8 billion was from loans and advances to its customers.
Another N86.6 billion came from loans to other banks, while the balance was from investment securities.
Access Holdings, however, incurred a whopping N419.2 billion and N411.2 billion in interest expenses on deposits from other financial institutions and customers, respectively.
In terms of fees and commissions, the bank earned a substantial N250.9 billion in the first half of the year. A significant portion of the fees came from credit-related fees (N91.7 billion), e-business income (N73.8 billion), and account maintenance charges and handling commissions (N29.58 billion).
It incurred N37 billion in expenses related to its e-banking operations.
Cost Spikes
We also observed a huge spike in the bank’s personnel expenses, which surged to N158.8 billion from N65.1 billion (+143.9%).

A closer look suggests there might have been a surge in hiring and promotions. For example, staff headcount rose from 7,567 to 8,009.
Moreover, the number of staff earning N14.9 million and above jumped from 1,193 to 1,782 in just six months. The number of managerial staff also rose from 621 to 968 employees.
Other significant cost drivers for the bank include its IT and e-business expenses, which increased by 265% to N111.2 billion.
The company’s AMCON surcharge also rose to N111.2 billion, up from N68.8 billion the previous year.
Additionally, the bank’s travel expenses more than doubled, rising from N10.7 billion to N24.5 billion.
In total, its operating expenses rose by 128% to N512 billion, driven primarily by IT and e-business expenses and AMCON surcharges.
Subsidiary Revenues
Apart from Access Bank South Africa and Kenya, all other foreign subsidiaries reported pre-tax profits.
Access Bank South Africa and Kenya posted pre-tax losses of N7.6 billion and N3 billion, respectively.

Access Bank UK and Access Bank Ghana were the top performers, contributing N111.1 billion and N40 billion, respectively, in terms of pre-tax profits.
Access Holdings’ new FinTech, Hydrogen Payment Services, reported a pre-tax profit of N238 million from a revenue of N3.1 billion, compared to N161 million at this time last year.
Access Pension, its newly acquired PFA, also reported revenue of N7.1 billion, while ARM Pension, also newly acquired, reported a revenue of N8 billion. Both entities were profitable.
Access Golf, another subsidiary of the holding company, also reported a revenue of N1.9 billion.
Access Holding PLC share price closed N19 on Friday, 3% down and lower than its public offer share price of N19.75 per share.