Access Holdings Plc · NSENG:ACCESSCORP
Access — H1 2023 Earnings Presentation
43 slides from Access's earnings presentation, September 2023
Slide 1: Half Year 2023 Financial and Operating Results Presentation
Half Year 2023 Financial and Operating Results Presentation September 2023
Slide 2: Outline
Outline • Macroeconomic and regulatory update • Strategic update • Financial and operating results • Access Banking Group • Capital & Liquidity Management • Asset Quality • Subsidiaries Performance • Digital Lending • Access Non-Banking Verticals 2 • 2023 Guidance
Slide 3: Caution regarding forward-looking statements
Caution regarding forward-looking statements The information presented herein is based on sources which The information should not be interpreted as advice to customers on the purchase or sale of specific Access Holdings Plc. “ the Holding Company” regards as financial instruments. Access Holdings P
Slide 4: A leading global financial institution
A leading global financial institution Our Mission Our Values To build and sustain one global platform, open for anyone to join ❖ Excellence where people can be connected to exceptional opportunities. “Putting in exceptional effort for exceptional results” ❖ Curiosity Our Vision “Never stop question
Slide 5: Macroeconomic & Regulatory update
Macroeconomic & Regulatory update 5
Slide 6: H1 2023 Global Operating Environment
H1 2023 Global Operating Environment Many economies in Sub-Saharan Africa experienced significant Global Outlook headwinds Interest Rates: Central Banks worldwide have been raising interest rates consistently over the past year, as a key strategy to effectively manage inflation. It’s expected that i
Slide 7: Highlights of the Nigerian Domestic Economy in H1 2023
Highlights of the Nigerian Domestic Economy in H1’ 2023 Key policy expectations from the new government include policies to increase in Foreign Direct Investments and Foreign Portfolio Investments, harmonization of FGN revenue collection agencies, Nigeria’s sovereign ratings upgrades, Tax Reforms, i
Slide 8: 2023 highlights of the regulatory landscape (Nigeria)
2023 highlights of the regulatory landscape (Nigeria) Banking ➢ The Central Bank of Nigeria (CBN) eliminates market Pensions segmentation in the FX market, consolidating all ➢ Draft Guidelines On The Operation Of Branches segments into the Investors and Exporters (I&E) Window. And Service Centers. ➢
Slide 9: 2023 highlights of the regulatory landscape (African Subsidiaries)
2023 highlights of the regulatory landscape (African Subsidiaries) Ghana: ➢ The Bank of Ghana held its benchmark monetary South Africa: policy rate steady at a record level of 29.5% in Q2 ➢ The South African Reserve Bank left its key repo rate 2023, after raising it by 150 bps in Q1 2023. unchanged
Slide 10: Strategic update
Strategic update > access Corporation
Slide 11: Building a globally connected community and ecosystem
Access Holdings Plc – building a globally connected community and ecosystem Large customer base Growing users on our digital channels Listings 2,863 ATMs 18.5mn unique 56,859+ POS (Primary equity listing) mobile app and internet banking ($400m Tier II bond) ($300m Senior bond) users B3 12.5mn + USSD
Slide 12: Strategic updates 2023 – agile execution mindset
Strategic updates 2023 – agile execution mindset May June 2023 2023 March June 2023 2023 Access Corporation Access Banking Group opened Access Bank acquired Access Pensions Limited, completed the US$300mn a subsidiary in Paris, 51% shareholding in crossed the N1 trillion mark Capital Investment expa
Slide 13: Access Corporation's footprint continues to grow as planned
Access Corporation’s footprint continues to grow as planned in this strategic cycle United Kingdom S&P: AA/A-1+ Moody’s: Aa3 Nigeria Fitch: AA Morocco France Existing markets Egypt Countries of Interest Malta Lebanon China France S&P: AA Moody’s: Aa2 Fitch: AA U.A.E India Niger Hong Kong Opened Pari
Slide 14: ESG performance
ESG performance Sustainability Investment Corporate Social Investment – H1 2023 Empowered Networks Minimum 1% PBT dedicated to Sustainability Reached Impacted 363 2,872,425 lives communities Invested 56,252 First commercial bank in Africa to Appointed to the Advisory Supported 38 Council (Green, Soc
Slide 15: Financial and operating results
Financial and operating results 15
Slide 16: H1'2023 highlights – sustained positive results across key performance indices
H1’2023 highlights – sustained positive results across key performance indices ₦590.1b 63m+ 7,610 20 Market Cap Customers Employees Countries Gross Earnings Total Assets Shareholders’ Funds ₦940.3bn ₦20.9trn ₦1.7trn +58.9% y/y +39.0% ytd +40.6% ytd Cost to Income Ratio Deposit Growth Profit Before T
Slide 17: Access Corporation delivered record earnings, with a stronger balance sheet
Access Corporation delivered record earnings, with a stronger balance sheet ₦’million H1 2023 H1 2022 %∆ Gross Earnings 940,311 591,806 58.9 Net Interest Income 224,239 197,502 13.5 Sustainable Non-Interest Income 333,473 219,502 51.9 revenue across Operating Expenses (315,941) (256,680) 23.1 Impair
Slide 18: Income statement metrics
Income statement metrics Net Interest Margin 6.4% 4.5% 3.8% H1'21 H1'22 H1'23 Yield on Assets 10.3% 10.4% 8.6% H1'21 H1'22 H1'23 18
Slide 19: Balance sheet metrics
Balance sheet metrics . NPL – Non-Performing Loans 19
Slide 20: Resilient and diversified revenue growth across key income lines
Resilient and diversified revenue growth across key income lines Gross Revenue (₦’bn) ➢ Gross earnings grew by 58.9% y/y to c. ₦940.3trn in the period (H1’22: ₦591.8bn), comprising 63% increase in interest income and 52% growth in non- CAGR % 940.3 interest income. +44% p.a. ➢ Interest income driver
Slide 21: FX Income Analysis & Impact on Capital (1)
Key Highlights of H1’ 23 Trading Income FX Income Analysis & Impact on Capital (1) ❖ High Yield Investment Securities • Leveraging high yield securities to boost trading ❖ Project and Receivables Financing • Pioneered the financing of state projects leveraging the States’ receivables Whilst overall
Slide 22: FX Income and Impact on Capital – changes in equity (2)
FX Income and Impact on Capital- H1 2023 – changes in equity (2) (₦bn) 42% YTD growth in Equity ▪ Value accretion from our investments in subsidiaries, which acts as a natural hedge, creating sustainable long-term impact on the Balance sheet. ▪ Given the unification we saw a translation gain of N340
Slide 23: Overall impact of the FX rates' unification as pressure on margins grow
Overall impact of the FX rates’ unification as pressure on margins grow 300 8.0% 6.4% 6.0% *+38% p.a. 4.5% 3.8% 200 4.0% 224.2 200.1 197.5 2.0% 100 0.0% H1'21 H1'22 H1'23 Net Interest Income Net Interest Margin Key NIM & COF Drivers *+79% p.a. (+37.2%) growth y/y in credit related loans .Deposits (+
Slide 24: Operating expenses – regulatory costs and inflation driven spend
Operating expenses – regulatory costs and inflation driven spend remain key drivers ➢ Cost to income ratio (CIR) improved to 60.7% in H1’ 23 from Operating Expenses (₦’bn), CIR 65.6% in HY’22. Our commitment to utilizing technology and innovation across all business verticals remains steadfast, enab
Slide 25: Total Assets Analysis – material growth in Restricted Deposits
Total Assets Analysis – material growth in Restricted Deposits 2,456* ➢ Total assets increased by 39.0% to N20,853trn between 1.6% 1.6% FY’ 22 and H1’ 23 (FY’22; N14,998trn). 1.3% 2,141* 20,853 1.1% 1,466* 14,998 ➢ Access Bank restricted deposits with the CBN has grown at 1,309* 11,732 a rate of 87.
Slide 26: Sustained growth from increased customer activities
Sustained growth from increased customer activities Customer deposits increased by 38.1% YTD to ₦12.51trn in the period CAGR, % (FY’ 22: ₦9.52trn), from new deposits, incremental growth from existing Deposits Mix (₦’bn) customers and impact of the FX rates unification. Margin (NIM) +45% p.a. Term de
Slide 27: Access Banking Group – Capital & Liquidity Management
Access Banking Group – Capital & Liquidity Management 27
Slide 28: Capital and liquidity ratios above regulatory thresholds
Capital and liquidity ratios above regulatory thresholds Capital and Liquidity (₦’bn) Funding sources (%) Other Liabilities Equity 7,257 6% 8% 6,292 Interest-Bearing Borrowings 4,892 9% 50.7% 49.9% Debt Securities Jun’23: 39.5% Issued ₦20.9trn 2% Customer Deposits from Deposits 24.5% 20.2% 22.0% Fin
Slide 29: Access Banking Group – Asset Quality
Access Banking Group – Asset Quality 29
Slide 30: Diversified loan book growth bolstered by effective risk management
Diversified loan book growth bolstered by effective risk management practices Loans & Advances to customers (₦’bn) Gross Loan Distribution by Sector 7,623 1% 1% 1% Sector Jun’23 Dec’22 3% Finance and Insurance 13.8% 10.7% 5,557 913 General Commerce 13.3% 12.2% General 10.3% 6.9% 4,446 3% 14% Oil & G
Slide 31: Overall improvements to asset quality and NPL
Overall improvements to asset quality and NPL NPL Distribution by Sector NPL Ratio by Sector Jun’23 Dec’22 Manufacturing - Others 9.4% 9.6% 1% 1% 0% Sector Jun’23 Dec’22 Real Estate Activities 7.3% 5.5% 1% General Commerce 29.9% 16.5% General Commerce 6.4% 4.3% Manufacturing - Others 13.0% 13.1% 3%2
Slide 32: Access Banking Group – Subsidiaries performance
Access Banking Group – Subsidiaries performance 32
Slide 33: Africa & International subsidiaries – strong growth hub
Key takeaways Africa & International subsidiaries’– strong growth hub African Subsidiaries OPERATING INCOME • Operating Income: ₦78.3bn up 13%y/y 47.6 (H1’22: ₦69.3bn) • Deposits from customers: ₦1.85trn up 60% 36.8 33.7 (H1’22: ₦1.1trn) 27.8 • Loans and Advances: ₦888.8bn up 78% 24.0 23.0 (H1’22:49
Slide 34: Improved Subsidiaries' performance
Improved Subsidiaries’ performance PBT (₦,bn) Subsidiary contribution to PBT : ₦63.2bn 37.7% contribution to Group PBT • Subsidiaries PBT performance grew by 53% in H1 2023 to ₦63.2bn (H1 2022: N41.4bn). • Access Bank Ghana recorded a PBT of N21.2bn in H1 2023 driven by series of strategic and busin
Slide 35: Access Banking Group: Retail Banking and Digital Lending
Access Banking Group: Retail Banking and Digital Lending 35
Slide 36: Increased scale and velocity of our digital lending
Increased scale and velocity of our digital lending Digital lending count, #,Thousand Digital lending value, ₦’million -19% p.a. 6% p.a. Products: Small Ticket Personal Loans ~₦77.0bn disbursement, a 3% y/y decline from ₦79.5bn in H1’22* Pay day and Instant Business Loans ~1,177,361 digital loans in
Slide 37: Improved revenue and transaction velocity on digital channels
Improved revenue and transaction velocity on digital channels Count H1’21 (mn) Count H1’22 (mn) Count H1’23 (mn) YonY Growth Value H1’21 (₦’bn) Value H1’22 (₦’bn) Value H1’23 (₦’bn) YonY Growth Channels Debit/Credit Card 210 216 221 2% 2,019 2,987 2,992 0% POS 37 23 20 13% 829 658 615 7% Mobile & In
Slide 38: Access Non-Banking Verticals
Access Non-Banking Verticals 38
Slide 39: Access Pensions: Future Shaping (Half Year Update)
Access Pensions: Future Shaping (Half Year Update) Products and Services AUM Analysis Retirement Saving Largest PFA by • 31% Y/Y growth post merger in number of Retirement Account (RSA) Fund Fund Ethical and Ethical and Non- AUM. 2nd Registered RSA Saving Account Management Management Non-Interest I
Slide 40: Access Hydrogen: Simplifying Payments (Half Year Update)
Access Hydrogen Access Hydrogen: Simplifying Payments (Half Year Update) NGN 3 Tn NGN 4 Bn ~4000 407% ▪ POS Hydrogen achieved a total transaction value of one Processed In POS and Instant Merchants MoM growth in hundred million within 38 days of operations through our Pay transactions onboarded acro
Slide 41: 2023 Guidance
2023 Guidance > access Corporation
Slide 42: Access Corporation: Financial Targets
Access Corporation: Financial Targets Key Takeaways H1’2023 Actual 2023 Targets 2027 Targets NIM is expected to be at least 6% in 2027, Return on Average 19.3% >20% 25-30% Equity this growth in NIM will be driven by increased PROFITABILITY Return on Average 1.6% >2% lending within the core Bank and
Slide 43: Investor Relations
Access Corporation Investor Relations Contact Information Webpage: https://theaccesscorporation.com/investor-relations/ E-Mail: Investor.Relations@theaccesscorporation.com ©Access Corporation 2022