Access Holdings, a leading financial institution, has reported a pre-tax profit of ₦222.78 billion for the first quarter of 2025, marking a 9.89% increase compared to the previous year. This growth was primarily driven by a significant surge in interest income, which rose by 58.28% to ₦980.68 billion. However, the bank’s core profitability was impacted by a sharp increase in interest expenses, which soared by 71.32% to ₦760.47 billion, resulting in a 20.13% decline in net interest income to ₦220.21 billion.
One notable observation is that Access Holdings only retained 22.45% of its interest income after accounting for funding costs, which is considerably lower than its competitors. This highlights the bank’s relatively high cost of funds compared to peers like GTCO and Zenith Bank. Managing liabilities in a rising interest rate environment has posed challenges for Access Holdings, leading to margin pressure on its core lending profitability.
Despite these challenges, the group managed to benefit from a strong performance in non-interest income. A significant increase in fee and commission income, along with substantial fair value and foreign exchange gains, helped stabilize overall earnings. This diversification of income streams proved crucial for Access Holdings in offsetting the impact of higher funding costs on its lending profitability.
The key driver behind the growth in interest income was earnings from loans and advances to customers and banks, accounting for 63.29% of the total income. Interest income from investment securities also saw a marginal increase in its share, contributing 34.14% compared to the previous year.
However, funding expenses posed significant pressure on the bank. The cost of servicing deposits, both from customers and interbank sources, exceeded ₦696.89 billion, representing an increase of over 80%. Additionally, interest expenses on borrowings and debt securities climbed to ₦63.58 billion.
Access Holdings found relief in non-interest income, with fee and commission income rising by 55.26% to ₦174.48 billion. Credit-related charges contributed ₦75.52 billion, showing a 70.11% increase, while electronic banking income generated ₦48.35 billion, up 44.83%. Gains from fair value changes and foreign exchange transactions also surged by nearly 80%, totaling ₦214.39 billion.
Despite a 5.81% drop in total assets, which stood at ₦39.09 trillion at the end of March, Access Holdings retained its position as one of the largest financial institutions by asset size. The decline in total assets was mainly due to reductions in loans, investment securities, and cash balances held with the Central Bank.
However, the bank demonstrated resilience in deposit mobilization. Customer deposits grew by ₦507.56 billion in a quarter marked by tightening liquidity, bringing the total to ₦23.03 trillion. This expansion in the deposit base played a crucial role in supporting the balance sheet, despite declines in other areas.
Overall, Access Holdings’ performance in the first quarter of 2025 reflects a mix of challenges and opportunities, with a focus on managing funding costs and diversifying income streams to sustain profitability in a dynamic market environment.
