Higher Cost of Fund Limits Bottomline

In its recently released audited H1:2024 results, Access Holdings’Gross Earnings grew by 133.56% YoY1
to NGN2.20trn mainly due to the spike in interest income (+142.59% YoY to NGN1.47trn) and non-interest income (+116.11% YoY to NGN719.83bn), an offshoot of the fair value and foreign exchange gain. Elsewhere, Operating Expenses increased by 127.61% YoY to NGN719.10bn, following higher
personnel expenses and IT & e-business expenses in the period. Profit Before Tax (PBT) and Profit After Tax (PAT) increased by 108.19% YoY and 107.71% YoY each to NGN348.92bn and NGN281.33bn respectively. Overall, Net Profit Margin declined to 12.82% in the period (vs. 14.41% in H1:2023).

We retain our target price for ACCESSCORP at NGN25.47 for 2024FY. At its current price of NGN20 as of 4th October 2024, this translates to an upside prospect of 27%. Thus, we put a “STRONG BUY” rating on the stock.

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