ACCESS BANK Q2: STRONG NUMBERS TO SUPPORT PRICE

ACCESS
Bourse	Nigerian Stock Exchange
Code Name	ACCESS
Sub Sector	Banking
Market Classification	Main Board
Nature of Business	Commercial Banking
Date of Incorporation	February 8th 1989
Date Listed	November 18th 1998
End of Accounting Year	31st December
Website	www.accessbankplc.com
Registrar	United Securities Limited
Share Price@Relsd (N)	5.60
Earnings per Share	1.37
Intrinsic Value(N)	13.70
Share Outstanding	28,927,971,631
Market Capitalization	161,996,641,134

Brief History: Passing through various stages over the past 26 years of operation, Access Bank now ranks among the top five financial institutions in Nigeria, engaging in investment, corporate, commercial, retail and business banking.

The Most Current Financial Result

Access Bank made available its scorecard for the period ended June 30, 2016 to the investing community in compliance with its post listing requirement.

The numbers revealed an impressive performance as against the comparable period.

The table below highlighted the released figures in comparison to similar quarter in 2015. As can be seen, Gross Earnings for the period grew by marginal 10% while profit after tax was up by 26% from N31.29 billion in 2015 to N39.49 billion.

Meanwhile, Total Comprehensive Income for the period stood above the comparable period by 105.93 percent as a result of FX transaction differences and value change of AFS financial instrument according to the numbers posted. In all, the result turned out a good performance considering the several tight economic regime within which the financial institutions operated through the reported quarter.

ACCESS
Financial Positions	2016(Million)	2015(Million)	% CGN
Cash and Cash Equiv. with CBN	612,253	421,807	45.15%
Gross Earnings	185,177	168,641	9.81%
Interest Income	112,292	98,861	13.59%
Interest Expenses	43,841	50,699	-13.53%
PBT	50,022	39,113	27.89%
PAT	39,486	31,287	26.21%
Total comp Income	70,167	34,073	105.93%
Total Assets	3,277,587	2,392,117	37.02%
Total Liabilities	2,848,970	2,089,473	36.35%
Total Deposits	2,179,406	1,792,596	21.58%
Loans & Advances	1,815,922	1,280,232	41.84%
Net Assets	428,616	302,644	41.62%

VolatilityCompared to industrial peers: Access Bank is fairly volatile, bit wn the other hand, with beta value of 0.99, it is theoretically safe to conclude that the stock's volatility is high, and thus qualifies for every trading strategy, long, medium or short term. The Total Debt to Equity is quite on the high side, especially when compared with the sectoral average.

Volatility	ACCESS	INDUSTRY
Beta-β	0.99	1.51
Total Debt to Equity	108.92	48.09

Profitability Ratios

In the face of continued tight monetary policy and unstable fiscal policy, businesses run within the country are expected to suffer sharp downturn in profitability. On the strength of the above statement, the management of Access Bank should be applauded for percentage growth achieved in profitability ratios. Interest Expenses to Gross Earnings adjusted down to 21.25% to reflect cost management of the bank. Profit before Tax Margin stood high against 2015 estimates with  16.47% variance. Profit Margin on the other hand stood high above 2015-Q2 at 21.32% against 18.55%. Return on Average Equity and Return on Average Assets both declined by a marginally  10.89% and 7.89% respectively.

Profitability Ratios	2016	2015	%CHG
Interest Expense to Gross Earnings	23.68%	30.06%	-21.25%
PBT Margin	27.01%	23.19%	16.47%
Profit Margin	21.32%	18.55%	14.94%
RoAE	9.21%	10.34%	-10.89%
RoAA	1.20%	1.31%	-7.89%

Efficiency Ratio

Measuring efficiency of the management of Access Bank, we have tested few ratios as shown in the tables below. Gross Earnings to Total Assets for the period is estimated at 5.65%, which is 19.86% below the 7.05% estimate of last year. Similarly, Gross Earnings to Equity went south to 43.20% since touching 55.72%. The bank's Equity Multiplier is satisfactory at 13.08%, implying that assets are mostly financed by equity and not debt. Thus, safety of investment is assured.

Efficiency Ratio	2016	2015	%CHG
Gross Earnings to Total Assets	5.65%	7.05%	-19.86%
Gross Earnings to Equity	43.20%	55.72%	-22.47%
Equity Multiplyer	13.08%	12.65%	3.36%
Loan to Deposit	83.32%	71.42%	16.67%
Loan&Adv to Total Assets	55.40%	53.52%	3.52%

Investment Ratios

Investment ratios estimated from the bank’s half-year result is as shown in the table below. The amount earned per unit of shares held (EPS)is estimated at N1.37, same aswas earned last year. Total Comprehensive Income per share for the period jumped to N2.43 per share, from the N1.49 reported for the corresponding period of last year.

Meanwhile, comparing the said EPS to the market price of Access Bank when the result was released, we can establish that the investment achieved a yield of 24.38% from the earned amount. The Book Value per Share of Access Bank is currently N14.82, up from the N13.83, when the result was released. This confirmed investors’ reason for revaluing the stock to the current N5.60 as it is expected to rally on the strength of the impressive earnings performance. 

Investment Ratios	2016	2015	%CHG
EPS	1.37	1.37	-0.14%
EPSATCI	2.43	1.49	62.93%
Earnings Yield	24.38%	32.01%	-23.86%
P/E-RATIO	1.03	0.78	31.33%
P/BV	2.65	3.10	-14.56%
BVPS	14.82	13.22	12.06%
Opex Margin	23.68%	30.06%	-21.25%
DIVIDEND
Dividend/Share (N)	0.25	0.25	0.00%
Payout Ratio	18.32%	18.29%	0.14%
Sustainable Growth Rate	7.53%	8.45%	-10.91%

Corporate Action

Dividend payout ratio is 18.32% while the sustainable growth rate is 7.53%.Total Loan and Advances is 55.40% of Total Assets. This is slightly above the 53.52% estimated in similar quarter of 2015.It was also discovered that 83.32% of Total Deposit reported for the period is currently in form of loans and advances. Dividend Yield of 4.46% for second quarter interim dividend is good and attractive for income investors.

ACCESS
DIVIDEND/BONUS DETAILS
Interim Div(N)	0.25
Bonus	N/A
Qualification Date	5/6/2016
Closure Date	6 September, 2016
Payment Date	13 September, 2016

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Three Years View

From the table below, it can be established that Access Bank has consistently released its full year result every second week of March. This assures of the reliability of the result.

Meanwhile a scan through the observed years confirmed a growth in income with corresponding increase in expenses year-on-year. Profit on the other hand grew by over 80% in the last three years. Similarly, Total Assets, Liabilities and Net Assets maintained a steady growth as can be seen in the below table.

ACCESS BANK THREE YEARS FIANNCIALS FIGURES
Financial Year	2015(Millions)	2014(Millions)	2013(Millions)
PRICE @ RELEASED DATE	6.10	6.10	9.80
DATE RELEASED	15/03/2016	13/03/2015	11/07/2014
GROSS EARNINGS	337,404	245,218	206,891
INTEREST INCOME	207,802	176,918	145,961
INTEREST EXPENSES	102,421	76,901	68,237
OPEX	135,470	104,605	101,181
PBT	75,038	52,022	43,531
TAX	9,169	8,959	7,499
PAT	65,868	42,976	36,298
TOTAL COMP. INCOME	66,207	47,117	34,642
CASH&CASH EQUIV.	478,409	405,015	439,460
TOTAL ASSETS	2,591,330	2,104,361	1,835,466
TOTAL LIABILITIES	2,223,528	1,826,950	1,590,984
NET ASSETS	367,801	277,411	244,482
DEPOSIT FROM BANKS	72,914	119,045	72,147
DEPOSIT FROM CUSTOMERS	1,683,244	1,454,419	1,331,418
TOTAL LOANS & ADVANCES	1,408,564	1,110,464	786,169

ACCESS BANK THREE YEARS FIANNCIAL RATIOS
ESTIMATED RATIOS
FINANCIAL YEAR	2015	2014	2013
DIVIDEND	0.30	0.60	0.60
EPS(N)	2.28	1.88	1.59
TCIP/SHARE	2.29	2.06	1.51
PE/RATIO	2.68	3.25	6.18
EARNINGS YIELD	0.37	0.31	0.16
BOOK VALUE/SHARE	12.71	12.12	10.68
PRICE TO BOOK VALUE	0.48	0.50	0.92
PBT MARGIN	0.22	0.21	0.21
PROFIT MARGIN	0.20	0.18	0.18
ROAE	0.18	0.15	0.15
ROAA	0.03	0.02	0.02
EQUITY MULTIPLYER	0.14	0.13	0.13
OPEX TO GROSS EARNINGS	0.40	0.43	0.49
LOAN TO DEPOSITS	0.80	0.71	0.56

Technical View

 Access Bank on daily time frame is side trending, waiting for a trigger in the up or down direction, which suggests that the impressive numbers and interim dividend released recently is likely to push the price slightly up as market expectation is surpassed by the actual performance, when measured by the moving average. Measuring by Bollinger Band on the other hand, it is noticed that the stock still plays within the bands and has not yielded any buy signal.

Fibonacci retracements revealed a possible recovery before N5.00. We therefore advice a close watch on Access Bank, meanwhile, buying the stock  for dividend income  is an intelligent investment decision as the board has announced N0.25 dividend.

Conclusion/Recommendations

The share price of Access Bank is quite volatile and may be played by traders only after a clear view of the trend. Fundamentally, the equity is strong, the half-year statistics stand strong in determining the next direction of its share price. The quarterly earnings so far reported are strong and impressive to support price, for investors, it is okay to positionfor the dividend. Management on the other hand, will need to come up with more workable strategies capable of positioning the bank at competitive advantage in the industry and increase payout ratio to create more value for shareholders. 

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Ambrose Omordion
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