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Access Bank’s Profit Declines to N62bn on Loan Impairment Charges

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  • Access Bank’s Profit Declines to N62bn on Loan Impairment Charges

Access Bank Plc announced its audited results for the full year ended 31 December, 2017, showing gross earnings of N459.075 billion, up by 20 per cent from N381.3 billion in 2016.

Growth in gross earnings was boosted by a 29 percent increase in interest income to N319.9 billion in 2017, from N247.2 billion in 2016 whilst net interest income grew by 17 percent from N163.452 billion in 2017, from N139.148 billion in the comparative period of 2016.

Similarly, non-interest income grew four per cent to N139.1billion in 2017 from N133.4 billion in 2016. Foreign exchange income soared from N3.598 billion in 2016 to N107.932 billion in 2017. However, loan impairment charges jumped 57 per cent from N21.953 billion to N34.467 billion in 2017, a development the bank attributed to the adverse lingering effects of the macro on asset quality in the industry.

Consequently, profit before tax fell by 11 per cent to N80 billion, from N90.33 billion, while profit after tax declined by 13 per cent to N71.439 billion to N61.991 billion.

Despite the decline in bottom-line, bank has proposed a final dividend of 40 kobo per share to its shareholders, in addition to 25 kobo interim dividend paid earlier, making a total of 65 kobo for the financial year.

A further analysis of the bank’s results showed that loans and advances grew 11 per cent to N2.064 trillion in 2017, from N1,855 trillion in December 2016, while total assets grew 18 per cent to N4.102 trillion in December 2017, from N3,484 trillion in the corresponding period in 2016.

Commenting on the results, Group Managing Director of Access Bank Plc, Herbert Wigwe, 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 percent to N459 billion in 2017. We grew our loan book to position it for improved earnings, whilst driving deposit mobilisation 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,” he said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.