Nigeria’s largest bank by total assets, Access Bank, raked in N123.9 billion in profits from its foreign operations in the first 9 months of 2022 as the bank’s aggressive investments outside Nigeria continue to pay off.
The bank reported a pre-tax profit of N147.2 billion year to date meanings its offshore operations contributed a larger percentage of the total.
This time last year, the bank’s pre-tax profit from offshore operations was N56.3 billion out of total profits of N135 billion.
Access Bank offshore investments are paying off
Aggressive offshore: Access Bank has been on an aggressive offshore expansion under its MD/CEO Herbert Wigwe operating in 14 countries including Kenya, Ghana, Mozambique, South Africa, Zambia, Rwanda, UK.
- The bank also owns majority shares in all the subsidiary countries abroad.
- The book value of the bank’s investments in all its subsidiaries stood at N247.3 billion at the end of the quarter compared to N215.7 billion same period last year.
- This was mostly driven by its new footprint in Cameroon and an increase in investment in the UK subsidiary.
Ghana leads the pack: Apart from Access Bank Guinea and South Africa, all the bank’s foreign operations reported a pre-tax profit with Ghana reporting the highest at about N31.6 billion.
- This compares to the N34.1 billion pre-tax profits reported in Ghana for the whole of 2021.
- The UK operations also did very well in the first 9 months of this year reporting N22 billion compared to N22.6 billion reported in the whole of 2021.
- Access Bank Ghana’s operations are the largest outside Nigeria with about 52 branches as of 2021.
Why it is expanding: The bank’s expansion plans focus on 5 core principles which it outlines as including building partnerships, being a payment aggregator, supporting multinationals by providing banking services in any country they operate in, scaling in the countries they operate, and most important diversifying outside Nigeria to mitigate earnings risk.
Nigerian Risk is perhaps the most important considering the state of the Nigerian economy amidst rising inflation and the exchange rate crisis. Nigerian banks, including Access Bank, have also complained bitterly about the central bank’s regulations on forex and more specifically the CRR. No surprise, Access Bank’s Nigeria’s contribution to profits has dwindled when compared to its net assets.
Meanwhile, Q3 Results show growth: Access Bank Plc reported an interest income of N265.4 billion in the first 3 months of 2022 representing a 35.7% rise from the same period in 2021. The company’s gross earnings in the corresponding period were N195.5 billion.
- The company also reported pre-tax profits of N49.5 billion compared to N37.8 billion reported in the corresponding period of 2021 representing a 30.9% increase year on year.
- Earnings per share for the quarter was 136 kobo compared to 98 kobo reported same period in 2022.
