‘Access Bank is on course to improving its performance’ 

Access Bank Ghana is on course to improving its performance over last year’s by end of 2017, in view of its half-year performance.

The bank recorded a profit before tax of GHC40.262 million. 

While this is 29 per cent lower than the GHC56.488 million recorded at half year in 2016, the bank says it expects to perform at the end of the 2017 financial year as it will not be making any provisions for impairment, as it did in 2016.

The Chief Finance Officer of Access Bank Ghana, Calleb Osei, said the bank made total provisions of about GHC55 million in 2016, which affected its final results, closing with GHC69.070 million profit before tax.

Mr. Osei said this during the bank’s first appearance at the Ghana Stock Exchange’s ‘Facts Behind the Figures’ series, which provides a platform for companies listed on the GSE as well as the Ghana Alternative Exchange (GAX) to explain its performance to investors, brokers, journalists and other stakeholders.

The year 2016 was a challenging one for most banks in Ghana, who had exposures to the energy sector.

Mr. Osei said while there had been many challenges, including a reduction in interest income, it had improved other sources of revenue significantly, thus the good performance.

He expressed the hope that the challenges that impacted its performance last year would not recur in the rest of 2017.

“We’ve embarked on aggressive remedial activities and those activities are yielding positive results so we’re hopeful by end of this year we will give a decent return to our investor,” he said.

He acknowledged efforts by government to settle the energy sector debts, saying part of the exposures had been settled, with the remaining expected to be settled by end of 2017 with the money raised from the bond that will be issued.

Government earlier, announced plans to issue a 15-year bond to settle the outstanding $2.4 billion energy sector debts.

Mr. Osei said the bank was also engaging the various business development companies to ensure that they were able to pay any outstanding exposure that would not be covered by government.

The Managing Director of Access Bank Ghana, Dolapo Ogundimu, who presented the banks half-year results, said resolving banks’ exposure to the energy sector would create more liquidity in the banking sector for investment in development, boost confidence and improve access to credit for the private sector, among other benefits.

He said due to the high interest rates and high Non-Performing Loans (NPLs) in the sector, Access Bank would remain conservative in its loans and advances as reflected in its half year results.

Total loans reduced by seven per cent from GHC1.29 billion in June 2016 to GHc1.2 billion in 2017.

“Interest rates are very high so we’re afraid to lend…the higher the interest rates are, the more you see higher NPLs,” he said, adding that it would continue to invest in treasury bills and focus on growing the sector.

Mr. Ogundimu said Access Bank would prioritise engagements to reduce its NPL ratio to the target of five per cent, from the current 20 per cent at half-year 2017.

“We believe that by the end of this quarter we should have reached about 15 per cent,” he said.

While the bank would continue to broaden its footsteps in Ghana, Mr. Ogundimu said it will focus more on expanding digital services to cut down on costs.

Access Bank’s Capital Adequacy ratio reduced marginally from 11.3 per cent in June 2016 to 10.8 per cent in June 2017; only slightly above the regulatory minimum of 10 per cent.

Mr. Ogundimu said the bank was still expecting over GHC100 million from its Initial Public Offering, while its parent company in Nigeria was considering giving it about $20 million capital.

“By the time all these come in, we should be closing the year at around 17.17 per cent,” he said.

SOURCE: GNA