Access Bank Equity Snapshot – March 2012
ISSN 1597 - 8842 Vol. 1 No. 91

This snapshot report placed the Q4 2011 earnings report of the bank under close scrutiny as regards to performance of the bank in the quarter and relates this in a clear and balanced manner without compromise as highlighted in the subsequent paragraphs.

Overview 

The bank maintained strong profitability posture and improved revenue performance in the year with impressive yearly and quarterly postures. The 48% growth in Interest Income and 63% growth in non interest income contributed to this while the improved earnings posture is largely driven by the consolidated revenue which resulted from the takeover deals.

More so, the bank gross earnings closed at N138.94billion with 53% (YoY) growth over the previous year figure of N91.14billion. This also reflected in the quarterly growth to close at 69.11% against 56.69% recorded in the previous quarter while this has placed the bank among top three by earnings ranking so far in the industry- this reflects some positive impacts due to the acquisition of Intercontinental Bank Plc. Though, the acquisition seems to have amplified the operating cost considerably.

Moreover, the profitability outlook closed brighter though slightly fall short of our expectation, we had expected the size of the gross earnings and combination of businesses to translate to better bottom-line significantly.

We observed that recoveries of N12.43billion formed 74% of the bottom-line while the quarterly performance of profitability outlook appeared weaker to close with 30.41% (QoQ) growth against 58.58% (QoQ) performance recorded in the previous quarter. 

In our opinion, the bottom-line figure does not justify the significant growth witnessed in the cost profile of the bank as the recoveries stake 74% of the profit declared in the quarter. The continued growth in the cost profile of the bank still translates to poor cost management and weakness in operating efficiency as operating expense hit all time high to close at N74.19bilion against N48.64billion.

Though, the bank gave cost of ICB in last quarter of 2011 financial year presentation as the major factor for overblown cost.

In the same manner, the EPS of 0.88 came in weaker against 0.99 recorded in the previous quarter; this could not be isolated from cost profile noted above.

Access Bank Plc in the last twenty-seven months January 4^th, 2010 to March 28, 2012, share price recorded -17.09% depreciations to close at N6.26 from N7.55 it closed at the end of January 4^th, 2010 trading session. With this trend, Access Bank Plc has dropped in value considerably.

In the year 2010 alone, the share price of the bank closed with +25.83% appreciations, as against +18.87% appreciations recorded in the entire market in the period. This positive performance showed a level of resilience in the bank’s stock in the period under review notwithstanding the general bearish trend of the market coupled with the shake up in the banking sector from August 14^th, 2009.

However, the year to date performance as at March 28, 2012, stood at +30.42% while market performance also closed significantly low at +1.11%



 

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