Access Bank Reports Flat 2017Q2 Profit, On FX Loss, Loan Provision

After weeks of anxiety, the board of Access Bank Plc, on Wednesday published its audited result for the half-year ended June 30, 2018, showing that flat growth in earnings and profit, even as a negative N4.189bn “other comprehensive income,” up from the previous N6.017bn, left “total comprehensive income for the period” at N35.435bn, down by N10.041bn or 22.08% from N45.477bn in the corresponding period of 2017.
This followed a N33.779bn net foreign exchange loss, as against previous half-year’s N59.022bn income, even as net loan impairment charge dropped from N10.362bn to N7.34bn. The situation was saved significantly also by the N59.564bn net gains on investment securities, as against the previous N3.645bn loss.

The profit slide notwithstanding, the directors elected to retain the dividend of 25 kobo per share, from earnings of N1.38 each, even as ratio of total impaired loans and advances to gross risk assets stood at 4.73%, slightly better than the previous 4.76%.
Specifically, gross earnings for the half-year stood at N2…, representing a N6.448bn or 2.62% notched above the … reported in the preceding period; with interest income at N186.686bn, up by 15.3% from N161.905bn; and interest expense jumping by a higher N22.526bn or 28.56%. This left a net interest income of N85.296bn, from N83.041bn; just as the net interest income after impairment charges climbed to N77.956bn from N72.676bn.
Fee and commission income for the period was better at N30.284bn than the preceding half-year’s N25.076bn; even as fee and commission income slowed down to N217.896m from N250.51m; resulting in net fee and commission income of N30.066bn from N24.826bn.

Net operating income soared to n10.267bn from N4.216bn; personnel expenses dropped slightly from N27.743bn to N26.085bn; even as rent expenses at N2.225bn was higher than the N1.665bn in 2017. Along with the other operating expenses of N61.884bn, down from N69.136bn, profit before tax for the period stood at N45.842bn, a N6.206bn, or 11.92% decline from N52.048bn recorded in the first half of 2017. Income tax however dropped by N6.371bn or 50.61% for the period under review, from N12.588bn, which analysts believe could be postponing the evil day, since the true picture would show up in the December full-year score-card. The tax reduction ensured a flat net profit at N39.625bn from N39.459bn.

Other comprehensive loss (net of related tax effects) stood at N4.189bn, compared to a N6.017bn gain, left total comprehensive income for the period at N35.435bn, which was N10.04bn or 22.08% down from the previous N45.477bn.
The group presented a slightly better balance sheet, with assets of N4.46tr, compared to N4.092tr; boosted by the N1.905tr customer loans and advance, which however dropped marginally from N1.995tr; followed by the N1.14tr cash and balances with banks; up from N953.944bn.

The auditors, Messrs PwC however called attention to the impairment on customer loans and advances to the tune of N104.3bn (notes 3.9, 4 and 23), arising from “materiality of the loans and advances balance net of impairment (N1.9tr)…”
Total liabilities for the period stood at N3.911tr from N3.586tr, lifted by the customer deposits which improved by N164.1bn or 7.31% from N2.244tr to N2.408tr. Shareholders’ funds however declined to N460.188bn from N508.539bn.

A breakdown of its loan book shows that oil and gas remain its biggest play field, accounting for N525.567bn, of which the oil services accounts for N234.541bn; followed by upstream sub-sector with N149.094bn; while government got N254.796bn, slightly up from N252.844bn.
The 25 kobo dividend will be paid to those whose names appear in the register of members at the close of business on September 6, 2018, which is the qualification date, while the register closes on Friday, September 7, 2018. Dividend payment will be made electronically to shareholders on Friday, September 21, 2018.

https://investdata.com.ng/2018/08/access-bank-reports-flat-2017q2-profit-on-fx-loss-loan-provision/