Access Holdings kicked off 2025 with a solid earnings boost, posting a pre-tax profit of ₦222.78 billion in the first quarter, up nearly 10% year over year.
The gain was powered by strong growth in interest income, yet rising funding costs limited its overall profitability compared to more efficient rivals in Nigeria’s banking sector.
Strong Revenue Growth, But Margin Pressure Persists
The group’s interest income soared by 58.28% to ₦980.68 billion, reflecting improved earnings from customer loans, interbank placements, and investment securities. Income from loans and advances alone accounted for over 63% of total interest earnings, up from 61% a year earlier, while investment securities contributed 34.14%, slightly above the previous year’s 33.89%.
However, this impressive growth was partially offset by a steep 71.32% spike in interest expenses, which ballooned to ₦760.47 billion due to higher costs associated with customer deposits, interbank borrowings, and debt instruments. Interest payments on deposits alone surged over 80% to ₦696.89 billion, while costs tied to debt securities climbed to ₦63.58 billion.
These rising funding costs squeezed net interest income, which dropped by 20.13% to ₦220.21 billion. Consequently, Access retained only 22.45% of its interest income after funding costs, far below peers like GTCO (80.11%) and Zenith Bank (70.58%). This highlights a significant disparity in cost efficiency among Nigeria’s top banks.
Diversified Earnings Cushion the Blow
Despite the margin pressure, Access Holdings benefited from a well-diversified earnings profile. Non-interest income played a crucial stabilizing role, growing substantially in the first quarter. Total fee and commission income rose by 55.26% to ₦174.48 billion, bolstered by credit-related fees (₦75.52 billion, up 70.11%) and electronic banking revenues (₦48.35 billion, up 44.83%).
Fair value and foreign exchange gains also surged by nearly 80%, contributing ₦214.39 billion, underscoring the group’s resilience in generating revenue beyond traditional interest-based channels.
Overall, earnings per share rose 12.18% to ₦4.88, reflecting stronger bottom-line performance despite macroeconomic pressures and rising funding costs.
Balance Sheet Dynamics: Deposit Growth Amid Asset Contraction
Access Holdings’ total assets declined by 5.81% to ₦39.09 trillion, largely due to reduced balances in loans, investment securities, and placements with the Central Bank. Loans and advances to customers fell by 4.58% to ₦10.96 trillion.
Nevertheless, the bank demonstrated strong deposit mobilization capacity, growing customer deposits by ₦507.56 billion during the quarter. Total deposits reached ₦23.03 trillion—a 2.25% increase—helping support liquidity ratios and stabilizing the bank’s funding base in a tightening economic environment.
Access Holdings’ Q1 2025 financial results reflect a bank with growing revenues and diversified income streams but still grapples with high funding costs. While strong non-interest income helped offset core margin weaknesses, efficiency gaps remain a competitive challenge.
The coming quarters will determine whether Access can optimize its cost structure and better align profitability metrics with top-tier peers in the Nigerian banking space.
