By Dipo Olowookere
The group managing director of Access Bank Plc, Mr Herbert Wigwe, has disclosed that the 5-year business strategy deployed by the management has continued to show effectiveness.
Mr Wigwe said this in reaction to the strong performance of the financial institution last year despite a challenging economic and regulatory landscape caused by the COVID-19 pandemic.
Access Bank 2020 performance
In the year, the lender improved its gross earnings by 15 per cent to N764.7 billion from N666.8 billion achieved in the comparative period of 2019.
This was driven by significant improvement in the retail banking arm of the business.
In 2019, the financial institution merged with the defunct Diamond Bank, one of the leaders in the retail end. The transaction was entered into to make Access Bank one of the forces to reckon with in the segment and last year, the dividend of this deal was visible for the blind to see.
Business Post reports that the retail arm of the business recorded revenue of N177.2 billion in 2020, 64.4 per cent higher than the N107.8 billion achieved in the 2019 fiscal year.
This was buoyed by a 5.8 million growth in customer sign-on during the year, especially through the bank’s financial inclusion efforts.
As a result, the bank’s customer deposits grew by 31 per cent to N5.6 trillion with savings account deposits standing at N1.3 trillion.
Similarly, net loans and advances grew by 18 per cent to N3.6 trillion in comparison to its FY 2019 figures of N3.1 trillion.
At the close of business on December 31, 2020, Access Bank had a profit before tax of N125.9 billion, higher than N111.9 billion in 2019, while the profit after tax closed at N106.0 billion versus N94.1 billion a year earlier.
Dividend payout increased
To reward its shareholders, Access Bank Plc increased its final dividend payout for the year 2020 by 37.5 per cent or 15 kobo to 55 kobo from 40 kobo.
In the financial statements for the year ended December 31, 2020, the lender said it intends to pay a final dividend of 55 kobo on Friday, April 30, 2021, to shareholders whose names appear on the register of members as at the close of business on Thursday, April 15, 2021.
Access Bank’s resilient performance “is testament to the effectiveness of our strategy and capacity to generate sustainable revenue,” Mr Wigwe was quoted as saying in a statement made available to Business Post.
According to him, “The strategic actions that the bank has taken over the past 12 months evidence a strong focus on retail banking and financial inclusion, an African expansion strategy and a drive for scale for sustainable value creation.”
The respected banker noted that, “In 2020, Access Bank proudly opened its doors for business in Kenya and Mozambique, further increasing our footprints across the African Continent.”
“Access Bank Zambia also concluded the acquisition of Cavmont Bank Limited in January 2021 and the group recently announced the approval by relevant regulatory authorities for the acquisition of Grobank Limited, creating an inroad into the South African market in the realization of the group’s strategic ambitions,” he added.
Mr Wigwe stated that, “In view of the opportunities that exist in the market, we will be transitioning to a HoldCo structure.”
Already, an approval-in-principle has been received by Access Bank from the Central Bank of Nigeria (CBN) for the restructuring and the new entity will consist of four subsidiaries in order to tap into the market opportunities that are available in the consumer lending market, electronic payments industry and retail insurance market.
“Going into the fourth year of our 5-year cyclical strategy, our focus remains on consolidating our retail momentum and expanding our African footprint in a sustainable manner,” Mr Wigwe said.
As the bank intensified its recovery efforts, it undertook significant write-off and leveraged its robust risk management practices. As a result, its asset quality improved to 4.3 per cent compared to its 2019 report of 5.8 per cent and this is expected to continue to trend downwards as it strives to surpass the standard it had built in the industry prior to the merger with Diamond Bank.