Access
Holdings
Full Year 2022
Financial and Operating Results
Presentation
April 2023
Outline
❖ Macroeconomic and regulatory
update
❖ Strategic update
❖ Financial and operating results
❖ Access Banking Group- Capital &
Liquidity Management
❖ Forward Looking Guidance
2
Caution regarding forward-looking statements
The information presented herein is based on sources which
Access Holdings Plc. “ the Holding Company” regards as
dependable. This presentation may contain forward looking
statements. These statements concern or may affect future
matters, such as the Holding Company’s economic results,
business plans and strategies, and are based upon the
current expectations of the directors. They are subject to a
number of risks and uncertainties that might cause actual
results and events to differ materially from the expectations
expressed in or implied by such forward looking statements.
Factors that could cause or contribute to differences in
current expectations include, but are not limited to, regulatory
developments, competitive conditions, technological
developments and general economic conditions. The Holding
Company assumes no responsibility to update any of the
forward-looking statements contained in this presentation.
The information should not be interpreted as advice to customers on the purchase or sale of specific
financial instruments. Access Holdings Plc. bears no responsibility in any instance for loss which may
result from reliance on the information.
Access Holdings Plc. holds copyright to the information, unless expressly indicated otherwise or this is
self-evident from its nature. Written permission from Access Holdings Plc. is required to republish the
information on Access Holdings Plc. or to distribute or copy such information. This shall apply
regardless of the purpose for which it is to be republished, copied or distributed. Access Holdings
Plc.'s customers may, however, retain the information for their private use.
Transactions with financial instruments by their very nature involve high risk. Historical price changes
are not necessarily an indication of future price trends. Investors are encouraged to acquire general
information from Access Holdings Plc. or other expert advisors concerning securities trading,
investment issues, taxation etc. in connection with securities transactions.
The information contained in this presentation is subject to, and must be read in conjunction with, all
other publicly available information, including, where relevant any fuller disclosure document published
by the Holding Company. Any person at any time acquiring the securities must do so only on the basis
of such person’s own judgment as to the merits of the suitability of the securities for its purposes and
only on such information as is contained in public information having taken all such professional or
other advice as it considers necessary or appropriate in the circumstances and not in reliance on the
information contained herein. The information is not tailored for any particular investor and does not
constitute individual investment advice.
3
A leading global financial institution
Our Mission
To build and sustain one global platform, open for anyone to join
where people can be connected to exceptional opportunities.
Our Vision
To create a globally connected community and ecosystem;
Inspired by Africa, for the World.
Our Values
❖ Excellence
“Putting in exceptional effort for exceptional
results”
❖ Curiosity
“Never stop questioning”
❖ Empathy
“Standing in someone else’s shoes and
seeing through their eyes”
4
Macroeconomic &
Regulatory update
5
6
2022 Global Operating Environment
• Global economy on a tight rope – ongoing
global banking crisis (Silicon Valley Bank,
Signature Bank, Credit Suisse with a possible
trickledown effect on emerging economies
including Nigeria.
• Ongoing impact of Ukraine/Russian war
• Knock on effect of supply chain constraints
from China lockdowns
• Crude oil prices rose above US$100 for the first
time since 2014
• Most central banks hiked interest rates to
combat inflationary pressures (particularly
energy & food)
• Monetary policies’ tightening
• The USD strengthened against the World’s
major currencies and the yields on emerging
market bonds spiked.
• Increased risk of recession across key
markets
Global Outlook
Many economies in Sub-Saharan Africa experienced significant
headwinds
Crude oil price stabilized above
$80 per barrel
Real GDP growth rate remained
positive although expanding at a
slower pace
Marginal drop in foreign reserves
but able to finance more than 7
months of import
High inflation due to higher food and
energy prices but prices are
moderating helped by increase in
benchmark interest rate
The official exchange rate recorded
modest depreciation of about 8.5% in
2022 due to FX illiquidity
Monetary policy tightening to dial
back inflationary pressures and
reduce negative real interest rates
Average 90-day T-Bill rate
decreased to 3.94% in Q4,
down from the Q3 rate of 7.29%
driven by an increased demand
for short-term instruments in the
fixed income market.
Oil production dropped to 0.94mbpd in September
2022 but ended the year on an upswing, hitting
1.23 mbpd* aided by measures introduced to
tackle oil theft
Highlights of the Nigerian Domestic Economy in 2022
Like other EMDEs*, Nigeria was not immune from the impact of the Russia-Ukraine crisis as inflation especially food and energy
prices rose. CBN raised interest rates multiple times to slow down accelerating inflation
* mbpd – million barrels per day * EMDEs – Emerging and Developing Economies
New government in Nigeria will be
faced with four key imperatives –
subsidy removal, debt restructuring,
FX rate adjustment and monetary
policy adjustments
Moody’s & Fitch Ratings downgraded the
sovereign on concerns around the macro indices
with contagion effect on 9 Nigerian Banks,
including Access Bank.
2022 highlights of the regulatory landscape (Nigeria)
Banking
• Redesign of the E-Naira by the CBN to control the
money supply and aid security agencies in tackling illicit
financial flows. The new Naira notes became available
to the public from Thursday, December 15, 2022. Under
the policy, the CBN expects to mop up about N2.7
trillion held outside the banking system, out of the N3. 2
trillion in circulation
• The Monetary Policy Committee of the Central Bank
of Nigeria voted to increase the benchmark interest
rate (MPR) from 14% to a 20-year high of 16.5%,
following the rise of inflation.
Pensions
• Due to the opening of the transfer window, the
competition in the industry has grown significantly as
the number of RSA transfers hit a record high in Q2
2022.
• The industry also witnessed some M&A activities in
2022 in it’s bid to meet the required minimum
Regulatory Capital of N5 billion, which was increased
from N1 billion by PENCOM, leading to a reduction in
the total number of PFAs from 22 to 20. M&A is
expected to continue in the Year 2023 as major
players look to acquire increased assets under
management.
MPR rate was 18% as at the end of Mar 2023
2022 highlights of the regulatory landscape (African Subsidiaries)
Ghana:
• Government of Ghana officially announced in December
2022 of plans to restructure its debt, on local
bondholders (of which Ghanian local banks account for
33% of total government debt, the largest group as at
December 2022) have been asked to swap GHS137.3
billion worth of domestic debt for new bonds.
• Parliament passed the e-levy bill in March 2022 at a rate
of 1.5%. The levy was expected to raise about GHS6.9
bn. The levy applies to instant payments, mobile money
payments, bank transfers and merchant payments.
Botswana:
• The Bank of Botswana is replacing the old Banking Act
with a new one. This is still at initial stages (bill stage).
Banking industry is doing its assessment.
Botswana:
• The Financial Intelligence Agency(FIA) has advised that
Botswana will undergo a mutual evaluation by the Financial
Action Task Force in 2024. A committee has been set up
that includes financial institution and regulators to work on
the gaps before the actual evaluation takes place
Kenya:
• Central Bank of Kenya (CBK) announced the reintroduction of
charges for transactions between mobile wallets and bank
accounts which was waived in March 2020. This will lead to
increased revenues on mobile transactions for Banks.
• Increased CBK surveillance on Digital lenders leading to
deregistration of 12 out of 25 small Digital lenders and
registration of 5 new Digital lenders. Being a competitive
environment, Banks are to ensure adherence to digital lending
regulations as prescribed in the Data protection act
Strategic update
10
85%
Access Corporation’s Global network and scale
Superior service through four SBUs,
across 17 countries including, the
UAE, UK, and 3 rep offices in China, India
and Lebanon
Corporate Commercial Business Retail
58 Million+
customers
More than the population of
85% (50) of African countries
Large customer base Growing users on our digital channels
18.5mn unique
mobile app and
internet banking
users
633 Branches
2,894+ ATMs
12.5mn + USSD
users
53,164+ POS
200k+
Agents
Consistent financial performance
₦1,388trn
Gross Earnings
(FY ‘22)
₦167.7bn
Profit before tax
(FY ‘22)
13.3%
ROAE
19.6%
CAR
14.7%
Tier 1 ratio
Significant gender diversity
6,824
Professional Staff
53% 47%
Awards & recognitions
2022 International Investors Award - Best Environmental and Social Performance Award
2022 Finance Derivative Award - Best Sustainable Bank Africa
2022 Euromoney Awards - Best Bank in Nigeria
2022 Global Sustainable Finance Awards - Outstanding Leadership in ESG-Related Loans, Africa
2022 Global Sustainable Finance Awards - Financial Leadership in Sustaining Communities, Africa
2022 Global Brands Magazine Awards – Best Digital Banking Brand
Listings
(Primary equity listing)
($400m Tier II bond)
($300m Senior bond)
B3
B-
B-
AA-
• Payments • Pensions
• Consumer lending• Insurance
Holdco verticals
Source: Access Bank Financial Statements
Retail Customers grew by 13mn in the year 2022.
11
A conscious & deliberate ESG strategy continues to be at the heart of our business
$50mn
Reg S Step-Up Green Notes due
2027 in the international capital
market via a private placement
Environment
Social
Governance
Launched the
implementation
Report on the Global
Principles for
Responsible Banking
First Commercial Bank in Africa certified by
Sustainability Standards and Certification
Initiative (SSCI)
World Finance Award -Best ESG Strategy (11
th
time
winner)
Pioneered
sustainability
reporting in the
Nigerian Financial
Sector
Environmental Audit
of all Branches across
Nigeria
Certifications and Memberships
1. SSA - Sub-Saharan Africa
20,500+ children beneficiaries
of a Science Technology,
Engineering, Art and
Mathematics campaign
Championed the Coalition Against COVID-19
(CACOVID)
Human Resource &
Sustainability Standalone
Board Committee
Developed an
ESG
Framework
First Corporate to issue a Certified
Green Bond in SSA
(1)
Board member, UNGC
Minimum of 1% of PBT
dedicated to
Sustainability
Reached 6,232,809
lives through
community
interventions
Impacted over
1,288
communities and
257 Non-
Governmental
Organizations
Employees
volunteered
381,733 hours
in community
projects across
Nigeria
Responsible waste
recycling in 75 office
locations, recycling a
total of 2,225.987kg of
waste recycled of cans,
paper, plastics, and
glass
167 offsite locations/
branches with ATMs
powered by solar
Developed GHG
emission
reduction strategy
for carbon abatement
and offset
By focusing on 6 key strategic priorities
Access has registered successes across its ambition
and vision over the past five years (2018 - 2022)
#1 in Nigeria
Top 10 in Africa
World’s most
respected
African Bank
Strong Franchise
outside of Africa
Access Bank has worked
towards its vision
Success Highlights
Retail banking growth and wholesale
bank consolidation
✓ 01
Focus on being digitally led
✓ 02
Being customer centric and focused
✓ 03
Analytics-driven insights and robust
risk management
✓ 04
Global collaboration
✓ 05
Building a universal payments gateway
✓ 06
Retail banking growth &
wholesale bank consolidation:
Retail grew to ~58M customers
surpassing the original
aspiration of 35M by the end of
2022
Global collaboration: Access
has attained the credit ratings at
the sovereign ceiling and
established a network of 13
subsidiaries
Building a universal payments
gateway: Access has launched
an African payments platform
with c.75% growth in revenues
between 2020 and 2022
Robust risk management:
Access Corporation has a
strong CAR ratio of 19.6%
1. Robust risk management 2. Organizing for growth 3. Flawless execution
Strategic enablers
13
We have reorganized to capture new opportunities
by transitioning to a HoldCo structure
5 Strategic objectives
The HoldCo consist of 5 subsidiaries;
1
Retail,
commercial,
corporate
banking
Asset
management
and pension
fund
administration
Payment &
switching
services
Consumer
lending &
agency
banking
Insurance
brokerage
Access HoldCo
(ecosystem
orchestrator)
Bank Oxygen Hydrogen Insurance
Brokers
Pensions
14
Value accretion
Agility and scale leverage
Best-in-class talent
Targeted consolidation
Enhanced risk rating beyond the
sovereign
2
3
4
5
1
Creation of Financial Technology play:
✓ Creating new market opportunities &
changing consumer lifestyle and
taste
✓ Guarantee customer service & data
analytics
✓ Creation of new income pools
✓ Optimise valuation
Go Live: Q3 2023
Go Live: Q4 2022
Go Live: Q3 2023
Go Live: Q4 2022
Access Corporation’s footprint will grow significantly in the next
strategic period
Countries of Interest
Existing markets
Nigeria
China
U.A.E
India
Lebanon
France
Malta
Hong Kong
United
States
Niger
Gambia
Kenya
Congo
Ghana
Angola
Zambia
Rwanda
Came-
roon
Tanzania
Morocco
Egypt
Burkina
Faso
Togo
Cote
d’Ivoire
Senegal
Guinea
Ethiopia
Uganda
Republic
of Congo
Mauritius
South Africa
Botswana
Nigeria
Sierra
Leone
Mozam-
bique
Benin
We will capitalize on our strong M&A capability and
ability to build organically to create value with
each expansion through disciplined geographic
growth.
The inorganic M&A opportunities would accelerate
scale within markets in a value accretive manner,
prioritizing countries with better sovereign rating
and complementary business landscape.
This expansion strategy will aid in building a less
risky environment, boost our capital conservation
strategy and develop a more resilient People &
Culture strategy across the Group.
Namibia
15
United Kingdom
S&P: AA/A-1+
Moody’s: Aa3
Fitch: AA
Nigeria
S&P: B-
Moody’s: Caa1
Fitch: B-
Congo
S&P: CCC+
Moody’s: Caa1
Ghana
S&P: B-
Moody’s:
B3
Fitch: B-
Cameroon
S&P: B-
Moody’s: B2
Fitch: B
South Africa
S&P: BB-
Moody’s: Ba2
Fitch: BB-
Botswana
S&P: BBB+
Moody’s: A3
Mozambique
S&P: CCC+
Moody’s: Caa2
Fitch: CCC
Kenya
S&P: B
Moody’s: B2
Fitch: B+
Zambia
S&P:SD
Moody’s: Ca
Fitch: RD
Rwanda
S&P: B+
Moody’s: B2
Fitch: B+
United States
S&P: AA+
Moody’s: Aaa
Fitch: AAA
France
S&P: AA
Moody’s: Aa2
Fitch: AA
Nigeria was downgraded by Moodys and S&P in 2023
Financial and
operating results
16
17
FY’2022 – Resilient financial performance, 1
st
financial institution in Nigeria to
cross gross revenues of N1trn
Total Assets
Cost to Income Ratio
Gross Earnings Shareholders’ Funds
₦1.388trn
+42.8% y/y
₦15.0trn
+27.9% y/y
₦1.2trn
+17.3% y/y
Deposit Growth
57.9%
N9.25trn
+33% y/y
₦302.1b
Market Cap
58m+
Customers
17
Markets
17
₦275.1bn
*Market Cap calculated as at Dec’30
th
Share price position of ₦ 8.50, March 01
st
share price position of ₦9.60 gives Market Cap of ₦341.2b
(Ghana Bond impairment – 103.1bn, Nigeria sovereign downgrade 4.3bn)
Profit Before Tax
+55.6% y/y
(Pre-Impairment adjs)
₦167.7bn
(Post-Impairment adjs)
(5.1%) y/y
6,824
Employees
+0.9% y/y
Access Corporation delivered record earnings, with a stronger balance sheet
solid and improved efficiency
₦’billion
%∆
₦’million
FY 2021
%∆
Metrics FY 2021 % ∆
Non-Interest Income 370,184 51.5
Impairment Charges* (83,213) 137.7
PBT(Post - Impairment adjs) 176,775 (5.1)
Loans and Advances
4,446 25.0
Total Assets 11,732 27.9
Customer Deposits 6,955 33.0
Shareholders’ Funds 1,050
17.3
After-Tax ROAE 17.8% (4.5)
Cost-to-Income
58.8% 0.9
Capital Adequacy 24.5% (4.9)
Liquidity 50.7% (11.2)
Loan-to-Funding 50.8% 7.9
Operating Expenses (371,066) 35.4
Net Interest Income 301,459 19.2
Sustainable
revenue across
income lines
Strong
Balance Sheet
Prudential
Ratios
18
Assets Under Management
**
* Impairment on Ghana Domestic & Eurobonds accounts for N103.1bn of charges, Nigerian sovereign downgrade accounts for N4.3bn
** Access Pensions commenced operations in 2022
N/A
PBT(Pre - Impairment adjs)
176,775
55.6
Gross Earnings 971,885 42.8
Cost of Risk (Loans and Advances)
2.0% 0.6
Cost of Risk (incl impairment on Other Assets)
2.0% 0.2
FY 2022
FY 2022
560,646
(197,790)
167,680
5,557
15,004
9,251
1,231
13.3%
57.9%
19.6%
39.5%
58.7%
(502,359)
359,431
FY 2021FY 2022
896,327
275,080
1,387,911
1.4%
2.2%
Key Income Statement Metrics – drivers of shareholder value creation
19
764.7
971.9
1,387.9
FY'20 FY'21 FY'22
Gross Revenue (in Billions)
106.0
160.3
152.2
FY'20 FY'21 FY'22
Profit After Tax (in Billions)
4.9%
4.3%
4.0%
FY'20 FY'21 FY'22
Net Interest Margin
63.4%
58.8%
57.9%
FY'20 FY'21 FY'22
Cost to Income Ratio
15.6%
17.8%
13.3%
FY'20 FY'21 FY'22
Return on Average Equity
9.0%
8.6%
9.2%
FY'20 FY'21 FY'22
Yield on Asset
Key Balance Sheet Metrics – challenging but strong growth across key lines
.
NPL – Non-Performing Loans
20
1.3%
1.6%
1.1%
FY'20 FY'21 FY'22
Return on Average Assets
8,680
11,732
15,004
Dec'20 Dec'21 Dec'22
Total Assets (in Billions)
5,587
6,955
9,251
Dec'20 Dec'21 Dec'22
Customer Deposits (in Billions)
4.3%
4.0%
3.1%
FY'20 FY'21 FY'22
NPL Ratio
65%
58%
63%
Dec'20 Dec'21 Dec'22
CASA Ratio
21
Total Assets – increased margin pressure from higher CRR , downward impact on
ROAE
Returns on Assets and Equity
4,954
7,143
8,680
11,732
15,004
2.1%
1.6%
1.3%
1.6%
1.1%
FY'18 FY'19 FY'20 FY'21 FY'22
Total Assets Return on Assets
849*
1,309*
1,466*
2,141*
22.5% 22.5%
27.5% 27.5%
32.5%
CRR
• Access Bank restricted deposits with the CBN has grown at
a rate of 39% over the past 5 years. This is non-interest
generating assets of ₦2.1trn, representing 14% of total assets.
• This significant growth in non-interest bearing assets, in addition
to the interest expenses generated from having the largest Retail
deposit in the Nigerian market, continues to increase the
pressure on Net Interest Margin, despite the healthy growth in
overall Net Interest Income.
• Official Cash Reserve Ratio has steadily grown over the past 5
years, rising to 32.5% in Q4 2022 (FY’18:22.5%) This
represents ₦675bn y/y increment in restricted deposits in FY’
2022.
• Return on Average Asset & Return on Average Equity stood at
1.1% and 13.3% respectively.
579*
1.3%
1.6%
1.1%
15.6%
17.8%
13.3%
FY'20 FY'21 FY'22
ROAA ROAE
* - Refers to Restricted Deposits with Central Bank of Nigeria – non interest bearing assets
Restricted Deposits
Regulatory costs – material growth over the years with significant profitability impact
• Access Banking Group has consistently paid the
highest regulatory fees out of all the five Tier 1
Banks since 2020.Regulatory fees CAGR
growth of c.18% between 2019 – 2022
• The regulatory costs includes the AMCON
charges and the Deposit Insurance Premium
• Significant uplift in PBT is expected, once the
AMCON and other regulatory fees are scaled
back.
14%
16%
17%
16%
13%
13%
14%
14%
15%
15%
16%
16%
17%
17%
-
25.0
50.0
75.0
2019 2020 2021 2022
AMCON & NDIC - Regulatory costs
Total Regulatory Charges Total Reg charges as a % of Total OPEX
489.2
601.7
827.3
114.3
145.0
335.5
116.7
159.2
197.6
44.5
65.9
27.0
FY'20 FY'21 FY'22
Interest Income Trading Income Fee and Commission Income Other Income
Diversified growing franchise that has proven resilient during turbulent times
• Gross earnings grew c. 43% y/y to c. ₦1.39trn in the period (FY’21:
₦971.9bn), comprising c. 60% of interest income and 40% in non-interest
income.
• CAGR increase of +35% over the past 3 years, which denotes sustained
growth and value accretion in the business
• Interest income drivers (+37% y/y, FY’22: ₦827.3bn):
− A 21% y/y increase in interest on Loans and Advances to ₦481.2bn (FY’21:
₦399.2bn) despite the high inflationary environment, Increase in interest income
was driven by a corresponding y/y growth of 25% in the loan portfolio.
− A 64% y/y increase in Interest Income from Investment Securities to ₦333.8bn
(FY’21: ₦203.7)
▪ Non-Interest Income drivers (+53% y/y, FY’22: ₦566bn):
− A 131% y/y growth in trading income to ₦335.5bn from ₦145bn in FY’21,
largely driven by growth in FCY & LCY deposits, for which allocation was done
into safe fixed income investments for both private & public sector
counterparties.
− A 24% y/y increase in Fee & Commission income to ₦197.6bn, largely driven
by increased income from credit related fees and commissions up 107% y/y.
− .
*Interest Income figures calculated as an addition of Interest income on financial assets not at FVTPL/not held for trading and
Interest income on financial assets at FVTPL/held for trading
CAGR %
Gross Revenue (₦’bn)
764.7
971.9
1,387.9
+35% p.a.
23
24
Improved Net Interest Income from stronger loan growth, higher securities yield,
dampened by high Cash Reserve Ratio
489.2
601.7
827.3
FY 2020 FY2021 FY2022
Interest Income
Loans(+25%) growth across all markets
Deposits (+33%) growth across all regions
Higher growth rate in non -interest bearing assets – driven by the growth of
Cash Reserves Ratio over the past 3 years
Higher cost of funds. Higher interest expenses (minimum interest on
savings deposit increased from 10% to 30% of MPR rate) for c.2.2m savings
customers from multiple MPR rate increases in 2022.
Active cost of deposit management and loans repricing to support positive
NIM growth
Level of yields from securities still relatively low in comparison to
inflation growth
• xx
Margin
Management
Volume
Growth
Higher
Interest Rates
Key NIM & COF Drivers
9.0%
8.6%
9.2%
3.3%
3.4%
4.1%
4.9%
4.3%
4.0%
FY 2020 FY2021 FY2022
Asset Yield (YOA) Cost of Funds Net Interest Margin
*CAGR %
*+30% p.a.
*+44% p.a.
226.3
300.2
467.8
FY 2020 FY2021 FY2022
Interest Expense
263.0
301.5
359.4
4.9%
4.3%
4.0%
0.0%
2.0%
4.0%
6.0%
0
100
200
300
400
FY 2020 FY2021 FY2022
Net Interest Income Net Interest Margin
2,302
2,568
3,890
1,310
1,492
1,898
1,975
2,895
3,462
Dec'20 Dec'21 Dec'22
Demand Savings Term
Continued focus on better balance sheet mix
Net Interest Margin (NIM)
Customer Deposits (₦’bn)
+29% p.a.
32%
20%
30%
CAGR, %
Customer deposits increased by 33% y/y to ₦9.25trn in
the period (Dec’21: ₦6.95trn), from the positive impact of
our channel optimization strategy on customer acquisition
and deposit mobilization.
Term deposits grew to ₦3.46trn from ₦2.89trn with (20%
y/y growth), as we locked in rates to mitigate the prevailing
interest rate environment
CASA
(1)
account deposits stood at ₦5.78trn (Dec’21:
₦4.1trn), accounting for 63% of customer deposits. This is
due improved customer acquisition, leveraging technology
and innovation and expanded agency network to increase
financial inclusion
1. Current accounts and savings accounts
25
2,565
4,256
5,587
6,955
9,250
50%
58%
65%
58%
63%
0%
10%
20%
30%
40%
50%
60%
70%
-
2,000
4,000
6,000
8,000
10,000
Dec'18 Dec'19 Dec'20 Dec'21 Dec'22
CASA MIX
Total CASA MIX
370.9
17
29.9
7.3
18.8
13.3
24.1
21.1 502.4
2021 FY
Actuals
Admin related Wages related New market
expansion
IT
Infrastructure
Spend
Regulatory
fees
Premises &
Prof Fees
Others 2022 FY
Actuals
26
Operating expenses growth aligned with inflation & targeted growth activities
• Overall Cost to Income ratio improved by c. 92bps y/y to
57.9% (FY’21: 58.8%) as revenues grew, we doubled down on
cost containment strategies, and continued with investment in
Infrastructure & Technology to support scale and next phase of
growth.
• Impact of the continuous investment from the last strategic cycle,
beginning to show in strong growth across all revenue lines
• Growth in operating expense by 35% y/y to ₦502.4bn (FY’21;
₦370.9bn) - driven by the double - digit inflationary environment
pushing up wages, growth in regulatory fees, impact of FX
devaluation, Full year impact of three new banking subsidiaries
recognized in 2022.
• IT Expenses – upgrade and revamp of existing IT infrastructure,
investment in core banking model (Flexcube) and upgrades to the
data warehouse infrastructure.
• Movement in “Others” includes Cash processing fees, security
related fees, Depreciation charges.
• Cost of Risk increased by 20bp y/y to 2.2% (FY’21: 2.0%), on
the back of Ghana sovereign debt impairments. However, Cost of
Risk on Loans and Advances dropped from 2.0% in 2021 to 1.4%
in 2022.
Operating Expenses (₦’bn), CoR and CIR
New Market Expansion relates to full year impact of new subsidiaries, South Africa, Mozambique, Guinea and Cameroon
Inflation driven
Regulatory
driven
+35%
Growth Driven
326.5
370.9
502.4
1.8%
2.0%
2.2%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
-
100.0
200.0
300.0
400.0
500.0
600.0
FY'20 FY'21 FY'22
Operating Expense Cost of Risk
Cost to Income
63.4%
58.8%
57.9%
27
Performance by Business Segments – broad base of profit generation
• Sizeable portion of Holding Company costs relates to professional fees incurred for the M&A transactions during the acquisition of the Pensions business, personnel costs and others
• Impairment from Ghana domestic & Eurobonds accounts for N103.1bn of charges, Nigerian sovereign downgrade accounts for N4.3bn
• Banking Group Entity includes intercompany balances
Notes
PBT- Profit Before Tax
Access Banking Group –
Capital & Liquidity Management
28
Customer
Deposits
62%
Deposits from
Financial
Institutions
13%
Debt Securities
Issued
2%
Interest-Bearing
Borrowings
9%
Other Liabilities
6%
Equity
8%
…..underpinned by a commitment to balance sheet strength
Funding sources (%)
• Capital Adequacy Ratio (CAR) is above regulatory limit of 15% at 20.2%* ,
down 4.3% YoY(Dec’21: 24.5%).
• Risk Weighted Assets (RWAs) grew by ₦1.4trn (+28% y/y), primarily driven by
strong, cautious and quality growth in the group's asset-book (42% y/y growth in
credit risk)
• Customer deposits continue to dominate the Bank’s funding mix at 62%, as we
deepen wallet share of corporates, commercial and retail customers.
• Liquidity ratio remained well in excess of regulatory minimum at 39.5%
(Dec’21: 50.7%)
• Drop in liquidity ratio was largely due to a significant increase in restricted deposits
y/y with the Central Bank of Nigeria
• Access Banking Group is well capitalized with regulatory capital above the
minimum requirement of 15%
Capital and Liquidity (₦’bn)
29
Capital Adequacy Computation - Basel II
Dec’22:
₦15.1trn
3,828
4,892
6,291
19.6%
24.5%
20.6%
46.0%
50.7%
39.5%
Dec'20 Dec'21 Dec'22
RWA (₦’bn)
Capital Adequacy Ratio Liquidity Ratio
Access Banking Group –
Asset Quality
30
12%
11%
11%
9%
7%
7%
5%
5%
5%
5%
4%
4%
4%
3%
3%
2%
2%
1%
General Commerce
Oil & Gas - Services
Finance and Insurance
Government
Construction
General
Others
Oil & Gas - Upstream
Oil & Gas - Downstream
Real Estate
Info. & Comm.
Food Manufacturing
Manufacturing - Others
Transportation
Cement
Steel
Conglomerates
Oil and Gas - Refinery
………….healthy growth in loan book post pandemic lockdowns
Gross Loan Distribution by Sector
Dec’22 Loans &
Advances to
customers:
₦5.6trn
Sector
3,611
4,446
5,557
Loans & Advances to customers
(₦’bn)
+24% p.a.
• Well diversified gross loan book of c. ₦5.6trn as at Dec’22 (Dec’21:
₦4.4trn), reflecting our strategic approach of mitigating concentration
risk with quality credit to critical and growth sectors of the economy.
• The FCY as a share of the loan book increased to 23.7% (Dec’21
19.7%).
• Loan-to-Funding ratio closed at 58.7% as at Dec’22 (Dec’21:
50.8%), reflective of a healthy and cautious growth in the loan book.
Loans by Currency
(1) The following sectors are included in “Others”: Agriculture, Education, Basic Metal Products, Flourmills & Bakeries, and Power & Energy
CAGR, %
31
74.1%
80.3%
76.3%
25.9%
19.7%
23.7%
Dec'20 Dec'21 Dec'22
LCY FCY
3,218
4,161
5,101
393
285
456
Dec'20 Dec'21 Dec'22
Loans & Advances to Customers Loans & Advances to Banks
Dec’22
11.4%
5.2%
14.4%
6.5%
5.7%
4.4%
4.2%
3.5%
2.6%
4.1%
4.0%
2.1%
2.7%
2.2%
0.2%
10.8%
7.4%
8.6%
12.2%
4.8%
11.4%
6.9%
4.9%
4.9%
4.4%
4.9%
4.3%
4.3%
3.4%
2.7%
1.9%
1.9%
0.8%
6.9%
8.8%
10.7%
Dec’21
Continued improvement in our Assets Quality
NPL Distribution by Sector
NPL Ratio by Sector
Dec’’22
Gross NPLs:
₦176.9bn
Oil and Gas Services
Oil & Gas - Upstream
Real Estate Activities
Food Manufacturing
Agriculture
Manufacturing - Others
General Commerce
Dec’21
13.0%
Dec’22
Others
Oil and Gas - Downstream
General
9.7%
6.1%
6.0%
4.1%
6.3%
8.2%
14.5%
8.6%
5.9%
Transportation and Storage
4,4%
Construction
Information and Comm.
0.3%
1.0%
Steel Rolling Mills
• Asset quality continues to improve, with NPL ratio down to 3.1%
(Dec’21: 4.0%).
• This is hinged on proactive post - disbursement monitoring and
robust risk management practices.
• 89% of gross loans in stage 1 classification underpinned by
strong asset performance and minimal credit risk in the loan
portfolio.
NPL Analysis
(1) The following sectors are included in “Others”: Education, Finance & Insurance, Government, Basic Metal
Products, Cement, Conglomerates, Flourmills & Bakeries, Oil & Gas Refinery, and Power & Energy
0.6%
32
161.2
181.5
176.9
121.6%
86.5%
100.4%
4.3%
4.0%
3.1%
Dec'20 Dec'21 Dec'22
NPLs (₦'bn)
NPL Coverage NPL Ratio
0.0%
0.2%
0.3%
3.8%
3.9%
4.3%
4.4%
4.8%
5.4%
5.5%
5.8%
8.0%
8.8%
9.6%
Sector
Dec’22
17.1%
4.1%
13.4%
9.8%
7.2%
5.6%
2.1%
7.3%
3.4%
3.6%
0.7%
8.4%
6.4%
11.1%
Dec’21
16%
13%
13%
11%
10%
8%
8%
7%
6%
3%
2%
2%
1%
0%
General Commerce
Manufacturing - Others
General
Information and Communication
Transportation and Storage
Real Estate Activities
Construction
Food Manufacturing
Oil & Gas - Downstream
Steel Rolling Mills
Others
Agriculture
Oil and Gas Services
Oil & Gas - Upstream
16.5%
2.7%
13.1%
9.5%
8.3%
6.6%
2.4%
6.1%
1.7%
0.7%
0.0%
8.5%
11.2%
12.6%
Access Banking
Group – Subsidiaries
performance
33
34
African & International Subsidiaries’ Performance
Key takeaways
African Subsidiaries
• Revenue: ₦206.6bn up 13%y/y (FY’21:
₦182.8bn)
• Impairments: ₦63.2bn up 329% y/y (FY’21:
₦14.7bn)
• Deposits from customers: ₦1.1trn up 10% y/y
(FY’21: ₦1.0trn)
• Ghana 28%, Botswana 23%, Zambia 10%
contribution.
• Loans and Advances: ₦498.3bn up 9%
(FY’21:455.3bn)
• Ghana Sovereign debt restructuring impacted
subsidiary stand alone PBT by c.132% y/y (FY’
21: N34.2bn
• New Subsidiaries
• Cameroon (operational May 2022)
• South Africa (operational March 2021)
• Botswana(operational Oct 2021)
• Cameroon and Mozambique have broken
even and contributed c.N2.5bn PBT to
African subsidiaries' revenue in FY’ 22
International Subsidiaries
• Revenue: ₦70.0bn up 22%y/y (FY’21: ₦57.2bn)
• Impairments: ₦15.9bn up 8% y/y (FY’21:
₦14.7bn)
• Deposits from customers: ₦577bn up 10% y/y
(FY’21: ₦396.9bn)
• Loans and Advances: ₦1.1trn up 36%
(FY’21:810.1bn)
• France subsidiary approval received – H2 2023
kick off expected .
PBT
PBT
*Banking Group Entity includes intercompany balances of N10.1bn
28.5
47.6
-6.0
FY'20 FY'21 FY'22
Africa Subsidiaries
7.3
22.6
25.1
FY'20 FY'21 FY'22
International Subsidiaries
35
Update on Ghana Sovereign debt situation
Key takeaways
Key updates
Next Steps
Government
of Ghana’s
action timeline
• The Domestic Debt exchange closed on 10
th
of February. Final
results from the Ghana’s Ministry of Finance shows participation in
the exchange was approximately 85% of eligible holders.
• Estimate that the Eurobond debt will have to be reduced in nominal
terms by between 25% and 30%, with the potential for an additional
reduction in the level of the interest coupons, on which the
Government has not been clear
• Unlike the DDE, which has now closed, restructuring of the foreign
bonds is at a much earlier stage and negotiations have barely
begun
• The restructuring will look to adhere to the common framework,
with NPV as the basis and not the asset base of the country,
given Ghana is a low-income country.
• Lazard, working on behalf of the Ghanaian Government is
concluding an economic model which will serve as the primary
basis for the restructuring
• African Group set up by Renaissance Capital alongside other
Africa based Eurobond holders, will begin engaging Lazard & the
Government of Ghana in the coming weeks . Targeted completion
date for restructuring is within 6 months
4
th
Dec 2022
❖ Impact of Ghana Eurobonds on Access
Banking Group
• Access Bank Group Exposure to Ghanaian’s
Eurobond is c.2.3% of Access Banking Group’s
total assets.
❖ Specific Actions Being Taken by Access Bank
Ghana
• Participation in the Domestic Debt Exchange
Programme
• Ongoing Deposit Mobilization
• Diversification of Revenue Lines
• Cost Optimization
• Contingency Funding
• Review of government related borrowing
❖ Group Level
• Independent Market Review
• Market Analyst Engagement
• Internal actions taken to create appropriate
reserves to support potential fallout
24
th
Dec 2022 27
th
Jan 2023
BoG suspends
payments on most of
its’ external debts
BoG launched a
Domestic Debt
Exchange
programme
Provision of range of
discount rates for the
valuation of domestic bonds
Subsidiaries’ performance dampened by Ghana Sovereign Debt Restructure
PBT (₦,bn)
• Subsidiaries’ contribution to the Banking Group’s performance stood at 11% (FY’21: 38%), with a PBT of ₦19.1bn
• Access Bank UK and Ghana accounted for 59% of Africa subsidiaries’ operating income of N198bn, up 11% y/y
• Access Bank Ghana recorded a PBT loss position of N22.3bn largely due to a c.30% write down in the value of investment securities in the
African subsidiary. We have commenced series of actions to mitigate and minimize future impairments
• Total deposits from subsidiaries amounted to ₦2.67trn contributing c. 23% (FY21: 20%) of total Banking Group deposits
Subsidiary contribution to
PBT : ₦19.1Bn
Access Banking Group:
Digital Lending
37
96,919
145,860
167,896
FY 2020 FY 2021 FY 2022
Increased scale and velocity of our digital lending – unlocking strategic value
Digital lending count, #,Thousand
Digital lending value, ₦’million
32% p.a.
-23% p.a.
~₦167.9bn disbursement, a 15% y/y growth from ₦145.9bn in
FY’21
~2,384,223 digital loans in the year, a 24% y/y decrease from
3,153,466 in FY’21. This is on the back of more stringent
eligibility criteria
~₦23.6bn digital lending revenue generated, 85% y/y
growth from ₦12.7bn in FY’21.
Products
Small Ticket Personal Loans
Pay day Loans
Device Financing
Salary Advance
38
3,997
3,153
2,384
FY 2020 FY 2021 FY 2022
Drove transaction income through enhanced digital channels transaction
velocity
39
Channels
Count FY’22 (mn) Count FY’21 (mn) Value ’22 (₦’bn) Value FY’21 (₦’bn)
YonY Growth YonY Growth
Debit/Credit Card 431 419 5,974 4,0386% 15%
POS 41 71 1,267 1,6872% 17%
Mobile & Internet
Banking
639 447 57,757 36,76254% 34%
ATM 136 159 2,070
2,161
USSD 805 782 2,424 1,92011% 8%
Total 2,055 1,880 69,494 47,02812 % 29%
(2%)
6%
403
39
296
146
590
156,747
Count FY’20 (mn) Value FY’20 (₦’bn)
3,966
783
24,027
1,759
2,377
32,457
Total channels transaction count, ₦’million
Total channels transaction value, ₦’billion
+46% p.a.
+18% p.a.
39
1,476
1,880
2,055
FY 2020 FY 2021 FY 2022
32,457
47,028
69,494
FY 2020 FY 2021 FY 2022
Forward looking
Guidance
40
PROFITABILITY
ASSET QUALITY
EFFICIENCY
PRUDENTIAL RATIOS
Return on Average
Equity
Return on Average
Assets
Yield on Asset
Cost of Risk
NPL Ratio
Cost-to-Income Ratio
Net Interest Margin
Loan-to-Deposit Ratio
Capital Adequacy Ratio
Liquidity Ratio
<60%
>5%
<2%
<5%
>20%
>50%
>65%
18%
>2%
>10%
2027 Targets
<55%
>6%
<1.5%
~3%
>20%
>60%
>65%
25-30%
>2%
>10%
2023 Targets
Access Corporation: Financial Targets
AUM (N’trn)
6.3
1.3
NIM is expected to be at least 6% in
2027, this growth in NIM will be driven
by increased lending within the core
Bank and by the growth in LendCo’s
business which will typically have
higher margins on average.
Healthy ROAE returns expected over
the next 5 year as we continue to
maximise returns for shareholders.
2023 target includes the impact of
the recently added capital to Access
Bank via AT1 .
ROE along with ROA are expected to
grow, as a result of improvements in
CIR and an increase in footprint
across higher efficiency locations
Key Takeaways
Source: Access Corporation Financial Model
Conclusion
The institution has transitioned to a Holdco with 5
verticals to capture the opportunities the African market
provides as the landscape evolves over the next few
years
Capital accumulation and protection over time despite
investments in infrastructure and growth – expected to
continue into the future
Access has positioned itself to be at the centre of
financial flows on the continent – trade, expanding and
deepening financial services and serving corporates with
excellence – creating a self sustaining ecosystem
Access will create a high-performance organization with a
strong bench of talent who are the best African leaders
with capabilities to deliver the corporation’s future
aspirations
Access Bank over the last twenty years has built a
strong financial institution through a disciplined
approach to executing its strategy which has
produced market beating results consistently and has
been value accretive
Access Corporation’s ambitions will be supported by 7 key
enablers. These enablers will ensure Access executes
seamlessly, becoming a Top 5 financial services institution
in the Continent by the end of the strategic cycle in terms
of revenues, asset base and on a balanced scorecard
basis
42
©Access Corporation 2022
Access Corporation
Investor Relations
Contact Information
Webpage: https://theaccesscorporation.com/investor-relations/
E-Mail: Investor[email protected]