Access Bank, a member of the 5 biggest bank in Nigeria released it’s nine months earnings report with Gross Earnings rising 88% year on year to N162b. Already, in 9 months the bank has surpassed the N138b it posted as gross earnings in the whole of 2011. But does that transcend to impressive profits? Hardly so! The bank posted net interest income of N76.5b up 67% from the N45b posted same period last year.However, interest margin for this period was 62% down 10% from the 69% posted same period last year. As if that wasn’t bad enough, the bank incurred operational expenses of N75b this period more than double what it incurred same period last year. Though at the end it posted N39b in operational profit, 116% more than it did last year, the margin tell a different story when compared to similar banks. For example whilst GTB posted operating profit margins of 49%, Access Bank posted just 24%. This is even lower than the 21% it was able to achieve last year and 27% it posted in the first half of this year.
With personnel cost more than doubling from N12.5b last year to N31b this year and “other expenses almost doubling to N44b year on year its not hard to see where the trouble lies. One wonders if Access Bank is making very good use of its assets as an asset turnover of 2.4%, half of GTB’s, suggest otherwise. Should the bank make more use of its deposits? If GTB can lend over 70% of its deposits why is Access Bank lending just about 55%? These are questions shareholders should ask.
Access Bank 9months unaudited accounts is officially posted on the website of the NSE