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Lower income tax expenses lift Access Holdings’ PAT to N89bn in H1 2022

By Kehinde Ibrahim, Lagos

DESPITE the high inflation rocking the Nigerian economy, Access Holdings Plc has announced that its profit after tax (PAT) grew to N88.739 billion in the first half (H1) of 2022.

This represents an increase of 2.21 per cent as the group recorded N86.819 billion in the same period of 2021. According to the group’s H1 2022 financial results which was released on Thursday, its profit before tax (PBT) rose marginally by 0.42 per cent to N97.791 billion from N97.379 billion reported in 2021. The group’s gross earnings grew to N591.803 billion, representing a growth of 31.42 per cent year-on-year (y/y) while interest income calculated using the effective interest rate rose by 22.51 per cent to N342.530 billion from N279.594 billion recorded in the half year of 2021 supported by impressive growth in income from loans & advances to customers (+37.0 per cent y/y to N238.94 billion).

The Holdco also reported an earnings per share (EPS) growth of 1.7 per cent y/y to N2.46 per share as against N2.42 per share recorded in the same period of 2021 and this was supported majorly by growth in the non-core income (+67.2 per cent y/y) segment.

According to the group, during the period under review, the Board of Directors proposed interim Dividend of 20 Kobo per ordinary share of 50 Kobo each on the 35,545,225,622 issued ordinary shares of 50k each payable to shareholders on the register of shareholding at the closure date. This equates to a dividend yield of 2.2 per cent based on the last closing price of N8.95 per share on the floor of the Nigerian Exchange Limited (NGX) on Wednesday.

Further analysis of the result revealed a slight expansion in income from loans & advances to banks (+1.8 per cent y/y to N8.09 billion) amid a decline in income from cash and balances with banks (-23.2 per cent y/y to N3.97 billion) and investment securities (-37.7 per cent y/y to N45.84 billion).

Elsewhere, non-interest income (NII) expanded by 67.2 per cent y/y to N193.84 billion on gains in investment securities (+375.8 per cent y/y to N64.14 billion) and FX revaluation (+367.3 per cent y/y to N11.28 billion).

Meanwhile, income from foreign exchange trading (-22.5 per cent y/y to N52.84 billion) and fees and commissions (-5.6 per cent y/y to N55.44 billion) both recorded declines. Despite the weaker funded income growth, non-funded income growth was substantial enough to support operating income (+23.4 per cent y/y) growth.

Also, operating expenses increased by 35.2 per cent y/y to N256.68 billion as all the contributory line items expanded during the period, evidenced by higher regulatory costs and inflationary pressures.

Precisely, increment was recorded in personnel expenses (+33.6% y/y to NGN58.27 billion), AMCON levy (+27.0 per cent y/y to N52.73 billion), NDIC premium (+11.4 per cent y/y to N11.10 billion), and depreciation & amortization (+8.0 per cent y/y to N21.70 billion). Following the faster OPEX growth relative to the operating income, the cost-to-income ratio (ex-LLE) settled higher at 72.4 per cent in H1 2022 (relative to 66.1 per cent in H1 2021).

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