FY 2017: Access Bank sustains robust liquidity, capital levels

By Chioma Obinagwam

Access Bank Plc. has said that it maintained robust capital and liquidity levels of 22.5 per cent and 47.3 per cent in the financial year ended December 31, 2017, respectively.

The bank added that its capital and liquidity levels is well above the required regulatory minimum, providing a strong buffer against the macro challenges and room to expand its business.

The CBN’s regulatory requirement for Capital Adequacy Ratio(CAR) for Deposit Money Banks(DMBs) in the period under review is 15 per cent and above whereas Non performing loan ratio is expected to be below 10 per cent.

The company disclosed this in statement released with respect to its audited results for the full year(FY) ended December, 2017, showing resilient growth in Total Income.

 Extracts from the results released to the Nigerian Stock Exchange (NSE) on Wednesday, March 21, 2018, showed that Access Bank recorded a Total Income of ₦459.1billion, representing an increase of 20 per cent over ₦381.3 billion recorded in the same period in 2016.

More so, growth in Gross Earnings was boosted by a 29 per cent increase in Interest Income to ₦319.9 billion in 2017, from ₦247.2 billion in FY 2016 whilst Net Interest Income grew by 17 per cent from ₦163,452 billion in FY 2017, from ₦139,148 billion in the comparative period of 2016.

Hence, the Group reasserted its capacity to deliver steady earnings despite a tighter operating environment.

Similarly, Non-Interest Income grew 4 per cent to ₦139.1billion, in FY 2017 from ₦133.4 billion in 2016, leading to an 11 per cent increase in the Group’s Operating Income to ₦302,596 billion in FY 2017, from ₦272,605 billion in FY 2016.

The growth in the Group’s earnings is underlined by an expansion in its core business, on the back of an enhanced asset book.

Loans and Advances grew 11 per cent to ₦2,064 trillion in 2017, from ₦1,855 trillion in December 2016.

Total assets grew 18 per cent to ₦4,102 trillion in December 2017, from ₦3,484 trillion in the corresponding period in 2016.

Additionally, the Group recorded an increase of 13 per cent in Shareholder returns of ₦515 billion in December 2017, from ₦454 billion in the corresponding period in 2016.

Although the Group posted significant growth in earnings, the adverse lingering effects of the macro-economy on asset quality in the industry led to the Bank taking prudent provisions in the course of the year, thereby dampening profitability, as Profit Before Tax(PBT) declined 11 per cent to ₦80.1 billion in FY 2017 from ₦90.3 billion in FY 2016.

As a result, the Group proposes a final dividend of 40 Kobo per share to its shareholders, in addition to 25 Kobo interim dividend paid during the period, making a total of 65 Kobo for the financial year. The dividend is subject to approval at the Annual General Meeting(AGM).

Having scaled the hurdle of regulatory requirement by the CBN for dividend payout, the Group proposed a final dividend of 40 Kobo per share to its shareholders, in addition to 25 Kobo interim dividend paid during the period, making a total of 65 Kobo for the financial year and is subject to approval at its Annual General Meeting(AGM).

 Access Bank noted that its fundamentals remain strong and the Group remains poised for sustainable growth in the coming periods.

Commenting on the results, Herbert Wigwe, Group Managing Director(GMD) said, “Our operating   performance   in   2017   was   impacted   by   the   residual   effects   of   macro-economic conditions of 2016, characterised by slow economic expansion and adverse credit conditions, which resulted in making conservative provisions on our loan book. Despite the macro and regulatory headwinds, our underlying business remained strong as reflected in the Gross Earnings growth of 20 per cent to  N459 billion in 2017. We grew   our   loan   book   to   position   it   for   improved   earnings,   whilst   driving   deposit mobilization from targeted segments to diversify our funding base.”

According to Wigwe, the year 2017 was pivotal for the Bank, as it concluded its 2013-2017 corporate strategic plan.

“Its successful implementation was hinged on discipline, hard work, and   an  unwavering   commitment to our  set  objectives.  I  am  particularly excited about the next phase of the Bank’s evolution centred on an integrated global franchise.   The   execution   of   the   2018-2022   strategy   commences   with   focus   on deepening our retail offerings, underpinned by strong digital and payment solutions.Throughout the next phase, we will continue to invest in technology as we establish a universal   payments   gateway   with   an   ecosystem   of   local   and   international partnerships,” he added.