Access Holdings Plc posted a mixed bag in Q1 2025, with the headline story being a slide in profitability metrics but a notable jump in operational efficiency. Return on equity (ROE) slipped to 4.96 % from 6.25 % a year earlier, while return on assets (ROA) edged down to 0.47 % versus 0.49 % in Q1 2024. The dip reflects tighter margins and possibly higher risk‑weighted assets, weighing on the bottom line. At the same time, the bank’s cost‑to‑income ratio (CIR) fell sharply to 60.05 % from 70.76 %, signalling tighter cost controls and improved operational discipline—a bright spot in an otherwise muted performance.
Valuation multiples have followed the profit decline. The price‑to‑earnings (P/E) ratio dropped to 4.56× from 5.63×, and the price‑to‑book (P/B) ratio slid to 0.32× from 0.52×, suggesting the market has already priced in weaker earnings and lower growth expectations. Share‑price movement in Q1 2025 was relatively tame, with the stock ranging between N20.45 k and N28.15 k and an average of N24.40 k. After a brief flat stretch in early January, the price drifted downward in mid‑February, punctuated by occasional rebounds, and settled at N21.90 k by May 2 2025.
Profitability under pressure: the fall in ROE and ROA points to earnings compression, possibly due to higher funding costs or slower loan growth. Efficiency gains, however, are clear—the dramatic CIR improvement indicates management is cutting costs and extracting more revenue from existing infrastructure, a key driver for future margin recovery. Valuation discount is evident; with P/E and P/B at multi‑year lows, investors may be betting on a turnaround, especially if the bank can sustain its cost‑cutting drive and improve asset yields. Market sentiment remains cautious: the modest share‑price volatility suggests investors are adopting a wait‑and‑see stance, watching for signs of earnings stabilization or upside from digital and retail banking initiatives.
For now, Access Holdings presents a classic value‑versus‑growth dilemma: cheap valuation but flagging profitability. A rebound in net interest margins or a further drop in operating expenses could flip the narrative, making the current price levels attractive for patient investors
