Access Holdings profit drops 5.9% as cost of funds hits ₦1.8 trillion
Access Holdings posted a 5.9% year-on-year drop in net profit for the financial year ended September, dragged down by soaring cost of funds that jumped to ₦1.8 trillion from ₦1.6 trillion. The group now spends 58.4% of its total interest income just covering what it pays depositors and borrowers—up from 56.7% a year ago. Fixed deposit rates at Access Bank, the flagship commercial arm, remain the main pressure point, making cost of funds the group's single largest expense category.
The numbers aren't all negative. Gross earnings rose 2.3% to ₦4 trillion, driven by a 12.4% jump in net fee and commission income to ₦534.9 billion and a 14.4% increase in other operating income to ₦160.7 billion. Impairment charges plummeted to ₦92.9 billion from ₦350 billion, easing the bad-loan burden that previously blocked dividend payments. Pre-tax profit actually grew 8.3% to ₦667.4 billion, though profit after tax dipped to ₦474.2 billion. Return on equity improved to 10.6% from 10%.
Chairman Aigboje Aig-Imoukhuede told shareholders in June the group is working to resume cash dividends. CEO Innocent Ike emphasized "stronger execution capacity, robust risk governance, and disciplined capital allocation" under their Scale-to-Value agenda. The group operates across 24 countries serving 63 million customers.
With impairment charges down 73% and fee income rising, is Access Holdings positioned for dividend recovery, or will stubbornly high funding costs keep eating into bottom-line growth?