Mr. Aigboje Aig-Imoukhuede, MD, Access Bank
By Obinna Chima
Access Bank Plc has refocused its commercial banking business to help build sustainable annuity income base for the institution.
A recent report from Vetiva Capital Management said the move would impact on the commercial bank’s profitability going forward.
The bank argued that shareholders of the bank were amongst the first set of stakeholders to reap the benefits of the recent industry reform.
It added that the shareholders would benefit more in the years ahead, going by the bank’s dividend payout of N8.994billion at the end of the financial year ended December 31, 2012.
This trend of generous reward to shareholders, analysts said was bound to improve, judging by the bank’s impressive earning so far, which had placed it ahead of industry peers.
According to Vetiva Capital which analysed the performance of the four banks in the country - Access Bank, First Bank, GTBank and Zenith Bank- Access Bank’s 2011 results had entrenched it amongst Nigeria’s Tier 1 Banks.
The analysis also showed that bank’s earnings capacity was driven significantly by its pricing.
The report, which focused on the 2011 financial scorecards of the leading banks also revealed that Access Bank earned N11.2 on every N100 interest earning asset booked on its balance sheet, which represents a distant gap to GTBank and Zenith Bank’s feat of N10.7 and N9 respectively. The report showed that beyond the core income source, Access Bank was also renowned for its treasury operations.
Commenting on the performance of the banks and their future prospect, the analysts submitted: “Access Bank’s enlarged balance sheet and increased customer base as a resulted of its acquisition of Intercontinental Bank would further strengthen its treasury business.
“Similarly, in their cross-sectional review of the banking sector and the two rounds of reforms in 2005 and 2009 which resulted in consolidation and mergers and acquisitions, the three banks - Access, GTBank and Zenith have demonstrated agility and resilience to shocks. These banks did not only survive the 2009 cyclone, they waxed stronger and; given their resilience and flexibility, it would not be out of place to conclude that they are banks built to last as they possess the key attributes; right people, focus on unique goals and discipline keep them consistently ahead of the industry.”
Continuing, it argued that its position was further strengthened by the fact that the capital buffer of the above mentioned banks would take them through the downturn in the market.
“With risk weighted Capital Adequacy Ratio (CAR) of 25 per cent, Access, GTBank and Zenith can comfortably grow their risk assets by 20 per cent under our base case scenario over the next couple of years, without seasoned equity. “Interestingly, Access Bank and GTBank are rapidly growing their brands outside Nigeria thus lending credence to the postulations that these names will be in the top echelon of Africa’s banking institutions over the next decade,” it added.