2012: ACCESS BANK TO DELIVER IMPROVED PROFITABILITY, DIVIDEND - REPORT

By MICHAEL EBOH
Following the conclusion of the acquisition of Intercontinental Bank, a significant improvement is expected in Access Bank Plc's bottom line and return to investors in the 2012 financial year, according to a report by Vetiva Capital Management.

Vetiva, in its analysis of banks' performance for the 2011 financial year, said Access Bank's N8.994 billion dividend payout for 2011, is a pointer to the fact that the bank's shareholders are already reaping the benefits of the recent industry reform, adding that the shareholders should expect greater benefits in the years ahead. According to the report made available to Vanguard, this trend of generous reward to shareholders is bound to improve consistently judging by the bank's earning capacity which has placed it in a strategic position among its peers.

The report further stated that Access Bank's earnings capacity was driven significantly by its pricing. 'Specifically, Access Bank with an estimated asset yield of 11.2 per cent dwarfs GTBank and Zenith which post 10.7 per cent and  nine per cent yields on their respective interest earning assets,'  it stated.

Continuing, the report declared, 'Access Bank earned N11.2 on every N100 interest earning asset booked on its balance sheet, which represents a distant gap to GTBank and Zenith Bank's feat of N10.7 and N9.0 respectively.

'Beyond the core income source, Access Bank is renowned for its treasury operations, whilst refocusing its commercial banking business to build a sustainable annuity income base, which is expected to impact its profitability.'

The report stated that Access Bank's enlarged balance sheet and increased customer base as a result of its acquisition of Intercontinental Bank would further strengthen its treasury business. The report further stated that three of the banks analysed - Access, GTBank and Zenith Bank, demonstrated agility and resilience to shocks, adding that the banks are built to last as they posses the key attributes; right people, focus on unique goals and discipline which keep them consistently ahead of the industry.

'This view,' the report said, 'is further strengthened by the fact that the capital buffer of these Banks under review should take them through the downturn in the market. With risk weighted Capital Adequacy Ratio (CAR) of 25 per cent, Access, GT Bank and Zenith can comfortably grow their risk assets by 20 per cent under our base case scenario over the next couple of years, without seasoned equity.'