Access Holdings Plc · NSENG:ACCESSCORP
Access — H1 2022 Earnings Presentation
41 slides from Access's earnings presentation, Sep 15, 2022
Slide 1: Half Year 2022 Financial and Operating Results
Half Year 2022 Financial and Operating Results September 15, 2022
Slide 2: 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 financial instruments. Access Holdings Plc.
Slide 3: Outline
Outline: ❖ Overview and strategic update ❖ Financial and operating results ❖ Access Banking Group ❖ Outlook and targets 3
Slide 4: Overview and strategic update
Overview and strategic update 4
Slide 5: Macroeconomic highlights of domestic operating environment
Macroeconomic highlights of domestic operating environment Comments The economy witnessed positive growth of 3.54% in Q2, recording a seventh Q4 21 Q1 22 Q2 22 Q3 22 consecutive quarter of growth since the recession of 2020. This came after a 3.11% expansion in Q1 2022. GDP Growth 3.98 3.11 3.54 NA
Slide 6: H1 2022 highlights of the regulatory landscape
H1 2022 highlights of the regulatory landscape • The CBN issued a circular on the review of operations of the NIP system requiring banks to provide customers with indemnity forms for transfers above 1 • The CBN extended the 5% per annum interest DECEMBER million (individual) and 10m (corporate), adh
Slide 7: 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 8: Lean & efficient HoldCo leadership structure
Lean & efficient HoldCo leadership structure driving a culture of accountability, innovation and growth Herbert Bolaji Lanre Wigwe Agbede Bamisebi CEO Executive Executive Read bio > Director Director Read bio > Read bio > Morounke Sunday Amaechi Olufemi Ekwochi Okobi Group Chief Group Group Corporat
Slide 9: Our portfolio of companies with significant complementarities
Our portfolio of companies with significant complementarities Access Corporation consists of 5 subsidiaries to begin with; Access Corporation (ecosystem orchestrator) Access Bank Asset LendCo PayCo InsureCo Management Group Nigeria Digital lending Payment & Insurance Pension Funds Rest of Africa Bus
Slide 10: Access has transitioned into a Holding Company to drive rapid growth
Access has transitioned into a Holding Company to drive rapid growth 7 enablers to help Access build for the future Become a full-scale ecosystem player To provide best in class, seamless and offering new, consistent Customer Experience and Access Holdco inter-connected service recovery to our custo
Slide 11: Access PFA aims to become a top market player in PFA by 27
Access PFA aims to become a top 3 market player in PFA by 2027 Access Corporation will have a top 3 PFA in Nigeria as one of its operating Overall companies to make it an end-to-end financial services ecosystem player Phase 1 (2022) Phase II (2023) Phase III (2024 – 2027) #12 in Aum Top 10 in Aum To
Slide 12: Why is Access Corporation establishing its payments business?
Why is Access Corporation establishing its payments business? Objectives Principles of PayCo of PayCo Achieve our maximum potential by controlling and PayCo will serve both Access and non–Access unlocking our destiny customers PayCo will aim to drive product/market fit to drive Stimulate growth and
Slide 13: PayCo operating company will focus on four key services
PayCo operating company will focus on four key services... Merchant payment solutions Cards servicing Product business Offline payments Online payment Switching Description Processing of card POS deployment and Provision of ecommerce Integration of banks for transactions, including servicing for ret
Slide 14: Why is Access Corporation creating a dedicated consumer lending company through LendCo?
Why is Access Corporation creating a dedicated consumer lending company through LendCo? Context Objectives There is a gap in consumer lending, especially Realize maximum potential in a growing for the under-banked that presents consumer lending market through unlocking a compelling opportunity to ca
Slide 15: LendCo will be primarily focused on digital loans to consumers and MSMEs
LendCo will be primarily focused on digital loans to consumers and MSMEs Area Description Customer Primarily retail customers (i.e., lower- and middle-income salary earners and self- Focus employed individuals) and micro-SMEs Product Primarily digital lending with savings and value-added services su
Slide 16: The case for a unique insurance brokerage company through InsureCo
The case for a unique insurance brokerage company through InsureCo Context Objectives CBN regulations bar the bank from owning non- Create end-to-end product offerings to serve bank financial institutions, for the Bank to capture emerging ecosystems and prevent value the emerging insurance opportuni
Slide 17: InsureCo will be focused on providing insurance intermediation and other value-added services
InsureCo will be focused on providing insurance intermediation and other value-added services Area Description InsureCo will operate as a licensed broker, seeking the best possible deals available in the Customer market for its clients (including Access Bank customers); Focus ▪ While Coronation Insu
Slide 18: Update on new Access Corporation's verticals
Update on new Access Corporation’s verticals Verticals Status Update • Divestment of Access Pension Funds Custodian completed in Q2 2022 • Acquisition of controlling interest in First Guarantee Pension Limited completed • AMCo (Pension Funds) in Q3 2022 • Continuation of an aggregator strategy to en
Slide 19: ESG is at the heart of our business
ESG is at the heart of our business Environment Social Governance ₦15bn 16% Championed the Coalition Against COVID-19 Launched the Pioneered raised in Green Finance. 1st Corporate decrease in (CACOVID) implementation sustainability in SSA to issue a certified Green Bond electricity 6,000+ children b
Slide 20: Access Corporation's Global network and scale
Access Corporation’s Global network and scale Lebanon Rep Office United U.A.E Kingdom Access UK Branch Office Branches(#) 1 Employee(#): 153 OCT 2008 China Gambia Rep Office Branches(#) 7 Employee(#): 54 Guinea OCT 2006 Branches(#) 2 Employee(#): 53 2021 Sierra Leone Branches(#) 6 India Employee(#):
Slide 21: Strategically Expanding our Footprint
Strategically Expanding our Footprint Clusters Global financial gateways Our Expansion Strategy is Deliberate and Disciplined, Focusing on Five Key Principles United Kingdom France Principles Examples Brief Description Hong Kong We aim to become an aggregator of financial services by 1) building a
Slide 22: Key business initiatives and enablers of our Expansion Strategy
Key business initiatives and enablers of our Expansion Strategy Our Africa Strategy is anchored on four key business initiatives and enablers Trade (imports and exports) Retail & Alternative channels Primary focus is to leverage established presence Retail ensures sustainability in all geographies b
Slide 23: Financial and operating results
Financial and operating results 23
Slide 24: H1'22 Access Corporation's Profile
H1’22 Access Corporation’s Profile ₦328.8b 49m+ 6,040 17 Market Cap Customers Employees Markets Profit after Tax Gross Earnings Shareholders’ Funds ₦88.7bn ₦591.7bn ₦1.1trn +2% y/y +31% y/y +2% y/y Capital Adequacy Ratio Total Assets After-Tax ROACE1 22.4% ₦13.2trn 21% -9% y/y +13% y/y -3% y/y Note:
Slide 25: Strong Execution of Strategy Accelerating Profitable Growth
Strong Execution of Strategy Accelerating Profitable Growth ROAE PAT (in Billions) Tier 1 Capital 89 22.8% 87 19.0% 18.1% 19.1% 16.7% 16.7% 14.7% 61 14.7% H1'20 H1'21 H1'22 H1'20 H1'21 H1'22 Dec'20 Dec'21 H1'22 EPS (in kobo) Gross Earnings (in Billions) Cost to Income Ratio 65.8% 65.6% 301 60.1% 248
Slide 26: Generating consistent & sustainable revenue across all income lines
Generating consistent & sustainable revenue across all income lines • Gross earnings grew 31% y/y to ₦591.7 bn in the period (Jun’21: ₦450.6bn), Gross Revenue (₦’bn) comprising 63% of interest income and 37% in non-interest income. • Interest income drivers (16% y/y, H1’21: ₦319.7bn): − A 35% y/y in
Slide 27: Conscious cost optimization despite the high inflationary environment
Conscious cost optimization despite the high inflationary environment Operating Expenses (₦’bn), CoR1 and CIR2 • Growth in operating expense by 35% y/y to ₦256.7bn (H1’21; ₦189.6bn), Operating Expense Cost of Risk Cost to Income driven by the high inflationary environment, high regulatory costs, exc
Slide 28: Delivered solid returns to shareholders
Delivered solid returns to shareholders Profit After Tax (₦’bn) 87 89 Basic Earnings Per Share: 61 252 k +2% (H1’21: 248 K) Pre-Provision Pre-Tax Earnings: ₦134.7bn +7% (H1’21: ₦126.2bn) Returns on Assets and Equity ROAA ROAE 22.8% H1'20 H1'21 H1'22 19.1% 16.7% • PAT grew to N89bn (+2%) from N87bn i
Slide 29: Underpinned by a commitment to balance sheet strength
…..underpinned by a commitment to balance sheet strength Capital and Liquidity (₦’bn) Funding sources 5,208 Customer Deposits 4,892 8% 5% Deposits from Financial Institutions 3,828 10% Debt Securities Issued Jun’22: 2% 50.7% 53.6% ₦11.7trn Interest-Bearing Borrowings 46.0% 59% 16% Other Liabilities
Slide 30: Access Banking Group
| Access Banking Group > access Corporation
Slide 31: Access Bank has continued to deliver solid and resilient results
Access Bank has continued to deliver solid and resilient results ₦’million H1 2022 H1 2021 %∆ Net Interest Income 197,502 200,018 (1) Non-Interest Income 219,384 130,879 68 Sustainable Operating Expenses (254,389) (189,802) 34 revenue across Impairment Charges (36,861) (28,669) 29 income lines Profi
Slide 32: Challenged margins driven by the tough macroeconomic environment
Challenged margins driven by the tough macroeconomic environment Yield on Assets (YoA) Net Interest Margin (NIM) Cost of Funds (CoF) Average Cost of Funds increased to 3.2% 6.4% from 2.9% as interest rates have risen 10.3% sharply in Q2, in conjunction with the slow 9.5% devaluation of the naira YOY
Slide 33: Ongoing deliberate efforts to optimize deposit mix
Ongoing deliberate efforts to optimize deposit mix Customer Deposits (₦’bn) CAGR, % Customer deposits increased by 13% y/y to ₦7.84trn in Net Interest Margin (NIM) the period (Dec’21: ₦6.95trn), reflecting the impact of our +18% p.a. continuous and deliberate deposit mobilization Deliberate efforts
Slide 34: Proactively maintaining a well diversified loan book
Proactively maintaining a well diversified loan book Net Loans and Advances (₦’bn) Gross Loan Distribution by Sector CAGR, % +20% p.a. 4,927 2.1% Sector Jun’22 Dec’21 3.3% 4,446 307 Net Interest Margin (NIM) 0.9% Oil & Gas - Services 12.2% 14.4% 3,611 285 5.0% 4.2% Oil & Gas - Upstream 4.6% 4.4% 1.9
Slide 35: Continued improvement in our assets quality
Continued improvement in our assets quality NPL Distribution by Sector NPL Ratio by Sector Jun’22 Dec’21 13.7% Manufacturing - Others 13.0% Sector Jun’22 Dec’21 Transportation and Storage 9.9% 9.7% Manufacturing - Others 13.5% 13.4% 7.0% 13.5% Oil & Gas - Downstream 7.8% 7.3% Food Manufacturing 6.9%
Slide 36: Increased scale and velocity of our digital lending
Increased scale and velocity of our digital lending Digital lending count, Digital lending value, #,Thousand ₦’billion 31% p.a. -27% p.a. 79,543 2,075,073 68,398 1,808,546 46,183 1,100,591 H1 2020 H1 2021 H1 2022 H1 2020 H1 2021 H1 2022 Products ~₦79.5bn disbursement, a 16% y/y growth from ₦32.6bn i
Slide 37: Drove transaction income through enhanced digital channels transaction velocity
Drove transaction income through enhanced digital channels transaction velocity Count H1’20 Count H1’22 Count H1’21 Value H1’22 Value H1’21 Value H1’20 Channels (mn) (mn) (mn) YonY Growth (₦’bn) (₦’bn) (₦’bn) YonY Growth Debit/Credit Card 203,426 167,717 156,265 21% 2,989 2,830 2,031 6% POS 99 42 40
Slide 38: Continued improvement in our subsidiaries' performance
Continued improvement in our subsidiaries’ performance PBT (₦,bn) • Subsidiaries’ contribution to the Banking Group’s performance stood at 42% (FY’21: 38%), recording a PBT of ₦41.6bn • UK and Ghana jointly accounted for 80% (FY’21: 86%) of total subsidiaries’ PBT, with a Return on Average Equity of
Slide 39: Outlook and Targets
| Outlook and Targets > access Corporation
Slide 40: Our outlook in 2022 is deliberate and disciplined, with a targeted focus on expansion and growth
Our outlook in 2022 is deliberate and disciplined, with a targeted focus on expansion and growth H1’21 YTD FY’22 Return on Average Equity 14.8% 16.7% >20% Outlook Cost-to-Income Ratio 60.1% 65.6% <60% ❖ Improve Asset Quality Net Interest Margin 5.06% 4.5% >5% ❖ Increase Transaction Banking Income C
Slide 41: Investor Relations
Access Corporation Investor Relations Contact Information Webpage: https://theaccesscorporation.com/investor-relations/ E-Mail: Investor.Relations@theaccesscorporation.com ©Access Corporation 2022