Access Bank’s HY 2021 result

Access Bank released its results for the half-year ended June 2021. There was a decent increase in both topline and bottom line.

Gross earnings grew by 14% from N396.8 billion in 2020 to N450.6 billion in 2021

Profit before tax grew by 31% from N74.3 billion in 2020 to N97.5 billion in 2021.

Profit after tax grew by 42% from N61 billion in 2020 to N86.9 billion in 2021

Shareholders must be quite happy as the bank bumped up its interim dividend from 25 kobo in 2020 to 30 kobo in 2021

The cost to income ratio (the proportion of income a firm spends on cost) fell from 65.8% in 2020 to 60.1% in 2021.

If management can drive the cost to income ratio to the 50/55% mark, then one would really see this engine fly. That would bring it in line with other tier1 peers (the only outlier being FBN Holdings)

On the downside, net impairment charges went up 74% year on year from N16.4 billion in 2020 to N28.6 billion in 2021. We should have more insight on this during the analyst call scheduled for this afternoon

We would also be paying attention to management’s targets for its African subsidiaries.

Group CEO Herbert Wigwe during the analyst call held this week indicated interest in further raising the bank’s stake in e tranzact a fintech firm. Access had increased its stake from 5% to 23% following a rights issue by e tranzact.

He also attributed the bank’s higher interest income to returns on the instruments held following a swap with the Central Bank of Nigeria (CBN). Interest income is the money a bank earns from loans, and instruments such as treasury bills and bonds.

The bank also within the week disclosed its intentions to raise capital through a Eurobond. The target fund size is up to $375 million. Proceeds will be used to boost working capital and support growth.