Access Holdings posts N222.78bn Q1 profit amid soaring funding costs

Access Holdings Plc has posted a pre-tax profit of N222.78 billion for the first quarter of 2025, reflecting a 9.89% year-on-year increase, buoyed by a sharp rise in interest income and robust non-interest earnings despite growing pressure from surging funding costs.

According to the group’s unaudited Q1 financial statements, interest income soared by 58.28% to N980.68 billion, driven primarily by improved earnings from loans to customers and banks—accounting for 63.29% of total interest income—as well as gains from investment securities, which contributed 34.14%. Both categories marked slight increases from the previous year.

However, the strong growth in interest income was sharply offset by a 71.32% surge in interest expenses, which hit N760.47 billion, reflecting rising costs of customer deposits, interbank borrowing, and debt servicing.

Interest expenses on customer and interbank deposits alone jumped over 80% to N696.89 billion, while expenses on borrowings and debt instruments reached N63.58 billion.

As a result, net interest income declined by 20.13% year-on-year to N220.21 billion, signaling increased margin compression. The bank retained only 22.45% of its interest income after funding costs—far lower than GTCO’s 80.11% and Zenith Bank’s 70.58%—highlighting the mounting pressure on Access’ cost of funds and lending margins.

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Despite this strain, non-interest income served as a crucial buffer, showcasing the group’s earnings diversification. Fee and commission income rose sharply by 68.35% year-on-year to N146.22 billion, fueled by:

Additionally, fair value and foreign exchange gains nearly doubled, hitting N214.39 billion—a 79.82% increase from Q1 2024—further supporting profitability.

On the balance sheet side, total assets dropped by 5.81% to N39.09 trillion, largely due to reductions in loans, investment securities, and cash balances with the Central Bank. Loans and advances to customers declined by 4.58% to N10.96 trillion.

Nevertheless, customer deposits rose by 2.25% to N23.03 trillion, a notable increase of N507.56 billion during the quarter, providing critical balance sheet stability amid a tight liquidity environment.

Earnings per share (EPS) for the quarter stood at N4.88, up 12.18% year-on-year, reflecting the overall resilience of Access Holdings in navigating a challenging interest rate and inflationary landscape.

With strong non-interest revenue streams and continued deposit growth helping to offset mounting funding pressures, Access Holdings’ Q1 2025 results underscore both the strengths and vulnerabilities in Nigeria’s evolving banking sector landscape.