Access Bank released its 2013 H1 results showing a 5.3% dip in Gross Earnings. Net Interest income dropped a massive 29% to N38.6billion compared to N55billion in 2012 H1. Operating income however rose mildly by 1.55 to N79.9billion compared to N78.8billion posted in 2012 H1. Operating income was mostly influenced by the N10.1billion loan write backs earned by the bank during the period.
Despite this, pre-tax profit went down by 13.6% to N25.7billion (2012 H1: N30.2billion) a fact made worse by operating expenses which rose 11%.
- This results is dismal and should set alarm bells off not just for the bank alone but for the industry as a whole as their challenges may just be contagious.
- The increase in operating expenses was in Q1 blamed on the increase to AMCON contribution base rate from 0.3% to 0.5%. But could this then be the only major reason for the over N6billion rise in Opex?
- The bank also identified higher cost of funding with a tenor beyond 90days as a reason for its high interest expense in Q1. It promised to reign in on that as Q2 results show
- On a QoQ basis the result did show a marked improved from Q1 as Net Interest Income rose 27% to N21.6billion. It was also in this quarter that the bank was able to claw back about N9.3billion in recovered loan, a remarkable feat by itself.
- The bank will also be worried that investment and other income did drop 51% Q2 2013 compared to Q1 2013. In fact, net commission and fees also witnessed a drop and will be seen as a major set back in the bank’s resolve to improve its income from retail sources.
- The company recommended a dividend of 25kobo per share. The share price dropped 0.9% to N10.90 today
Access Bank released its 2013 H1 results in the website of the NSE