Access Bank’s Profit Rises on N85.28bn FX

0
58


Access Bank logo

 

By Our Reporter

 

Access Bank Nigeria Plc, the largest lender by total assets in Africa’s most populous nation, has recorded an increase in profit, thanks to foreign exchange gains brought on by currency devaluation.
For the first three months through March 2022, Access Bank’s net income rose by 9.25 percent to N57.40 billion from N52.54 billion as at March 2021.
The growth at the bottom line (profit) was underpinned by a net gain on foreign exchange of N85.28 billion, and that helped offset the drop in net interest income.
Banks make money on their dollar denominated assets when the currency is devalued by the regulator. In 2014, the exceptional item was the major driver of banks profit that adds impetus to the argument that monetary policies make or mare a lender.
It is important to note that the improvement in the yield environment also propelled Access Banks’ revenue.
This is because a high interest rate regime that undermines companies earnings and crimps growth is a boon to banks as they make more money, by taking advantage of the difference between the interest banks pay to customers and the interest the bank can earn by investing.
Interest income from loans and advances was up 20.78 percent to N173.68 billion in March 2022 from N143.79 billion as at March 2021.
Interest income from treasury bills were up 67.91 percent to N63.27 billion in the period under review from N37.68 billion as at March 2021.
However, net interest income dipped by 7.02 percent to N87.35 billion in the period under review, and the reduction was due to a 73.23 percent increase in interest expense.
The lender has a total loan book of N4.71 trillion, which is 4.66 percent higher than 2021’s N4.50 trillion.
Deposits from customers were up 7.76 percent to N7.49 trillion in the period under review from N6.95 trillion the previous year.
Access Bank was in the front burner of mergers and acquisition last year as it continues to consolidate its position in the Nigeria market.
In 2021 it announced: 1) the acquisition of controlling shares (90.35%) in Access Bank South Africa (formerly known as Grobank Limited; 2) purchase of a 78.15% stake in BancABC Botswana; 3) the acquisition of BancABC Mozambique; and 4) the merger of Access Bank Zambia and Cavmont Bank.
Access Bank remains steadfast in rewarding shareholders from distributable profit. It has declared an interim dividend of N0.70 for every ordinary share.

LEAVE A REPLY

Please enter your comment!
Please enter your name here