Access Bank Plc has announced that it made a profit before paying tax of N50 billion in the first six months of 2016 covering the period January to June. The bank’s profit for the period is 28% higher than the N39 billion it made in the comparable period of 2015, which is an indication that Access Bank has become more profitable this year compared to last year.
One of the business areas that boosted the bank’s profit, based on its results released to the Nigerian Stock Exchange on 19 August was money made from fees and commissions charged on its services. In the first six months of the year, Access Bank made N36 billion as fees and commission income, N18 billion, or twice more money than it made in the same period of 2016.
Banking analysts say that Access Bank is benefiting from its digital banking offerings. The bank has pushed its digital banking services aggressively since the beginning of this year, which is beginning to impact positively on its results as more of its customers adopt the services.
It recently re-launched PaywithCapture, an advanced digital payment application that that enables individuals to make payments for goods and services by scanning a pre-generated QR-Code. Realisation gains made on dollar based loans and foreign exchange holdings also contributed to the bank’s profits for the period.
The bank profit after tax for the period stood at N39.5 billion, representing an increase of 26% over the N31.3 billion made in corresponding period of 2015. Earnings per share were up 19% to close at N1.61 per share.
Cheering news for shareholders is a drop in the bank’s cost-to-income ratio to 53.7% from against the 2015 year end close of 59.2%, which indicates that the bank is releasing more of its earnings to profits, a good sign in the increasingly tough operating environment. The bank’s board has recommended an interim cash dividend of 25 kobo.
On the negative side, there was a 15% increase in impairment charges to N10.21 billion while the bank’s non-performing loans ratio rose marginally to 1.9%. However, the NPL ratio is well below the Central Bank of Nigeria recommended benchmark of 5% and current average industry estimated ratio of above 10%. The result also shows that the bank has made adequate provisions for its non-performing loans.
Investors are apparently impressed with the bank’s half year results pushing up its share price by 4.64% to close at N5.86 on 22 August. The bank’s share price has gained 20.8% since the beginning of the year.