The headlines you’d hear following Access Bank release of its 2012 full year audited accounts will surely sound like this “Access Bank Increases Profits after tax by 151%!!!”. Well, that is quite true going by the results published today on the website of the NSE. The bank increased Gross Earnings by 53% to N208billion for the year. A huge portion of its gross earnings came from Interest Income which garnered about 77% of earnings or N161.4billion. Net Interest Income, an important metric in determining how efficient a bank is at making money from its core function as a lender also saw some marked improvement. The bank posted a Net Income of N96billion (2011:N69billion) for the year a margin of about 60% (2011:65.7%)
The bank spent more on operating expenses in the year under review as expenses rose 33% year on year to N87.5billion. In terms of efficiency, the bank is spending N67 of every N100 in Net operating income on paying salaries and running admin cost. Personnel Expenses grew a whopping 53% to N33.6billion during the year. The Bank is spending N25 on employees for every N100 of Net Operating Income it earns (GTB spent an equivalent of N14). It will be interesting to exactly know the reason for this which will be possible when they publish their annual report.
In what might seem like a blip to their results the bank generated negative operating cash flows of about N13billion surviving mainly on cash received from sale of investments and cash brought forward from prior year. IN 2011 it generated a whopping N120billion as cash flow from operations
Access Bank will go on to post a Profit After Tax of N42.8billion a 150% rise from the N17billion posted earlier. Pre-Tax profit which is probably a better industry measure grew about 86% to N44.8billion. On the deposit side, the bank grew its deposits by an impressive 9% to N1.2billion putting them higher than GTB at the end of the year. Loans during the year also grew by about 5% to N600billion (2.5x its Net Assets).
Investors reacted cautiously to this result as its share price rose mildly to by N0.01 to N10.5. The share price has a current PE ratio of about 6.2x and has a trailing price to book ratio of 1.03 making it one of the cheapest stocks in the market. They plan to pay a total dividend of 85kobo per share in two tranches of 25koko and 60kobo. Total dividend yield amount to an impressive 8% (even though you might have to adjust it lower since dividend will be paid twice) and a payout ratio of about 50% of earnings.