Similarly, the bank’s long term Nigeria national scale rating was upgraded to ‘ngAA-‘ from ‘ngA’, attesting to its continued adherence to global best practices, sound corporate governance and best-in-class risk management framework.
The development is impressive given Access Bank’s stability, which insulated it from the gale of rating downgrade witnessed by some of the world’s largest banks last year.
This is the second consecutive upgrade the bank has received in two years and attests to its resilience and its importance to the Nigerian financial system and economy.
The rating review has further affirmed Access Bank’s position amongst Nigeria Tier 1 banks as the bank is no longer excluded from rating nomenclature that characterises the exclusive league. Correspondingly, the upgrade is an acknowledgement of the bank’s successful integration of Intercontinental Bank and its reduction of risk related to foreign currency lending.
Justifying the rating upgrade; S&P said: “Access Bank completed the integration of Intercontinental Bank in 2012 to become the fifth largest bank operating in Nigeria, and a highly systemically important financial institution.
“We believe that the bank’s improved franchise, branch network, and cost of funds will enable it execute its strategy to lend increasingly to Nigeria’s most creditworthy institutions.
“We also think that the risks the bank faces from foreign currency lending, although still relevant, have decreased due to stronger risk management and lower foreign currency exposure. Consequently, the bank’s credit losses should continue to compare well with those of Nigeria’s top rated banks through the next credit cycle”.
Justifying its rating of the bank, the S&P said: “We base our view on the bank’s cost of risk, which has compared favourably with levels of rated peers over the past five years while stating that the factors highlighted for the upgrade in the bank’s rating would result in future asset quality that compares well with levels at the highest rated Banks in Nigeria”.
Over the years, Access Bank has evolved into a financial powerhouse with consistent record of impressive performance and history of creating value for its shareholders. For the year ended December 31, 2012, the bank recorded a Profit Before Tax (PBT) of N44.9 billion. The result showed significant improvements across key profitability indices as the bank’s Profit After Tax (PAT) grew by 150 per cent to N42.9 billion compared with the N17.1 billion recorded in the corresponding period in 2011.
The bank’s performance during the period clearly highlighted the efficacy of the sustainable banking model evolved to nurture the bank to continental leadership; as shareholders have begun to reap the benefits of the adoption of this model, following the growth recorded in the bank’s earnings.
Pointedly, the bank’s earnings per share almost doubled, growing from 86k in the previous year to 169k while dividend per share increased by 42 per cent. Similarly, gross earnings rose by 54 per cent to N208.3 billion in relation to last year’s figure of N135.6 billion, which reflects a cumulative annual growth rate of N33 billion over the last four years.
Analysts have described the bank’s performance as a valid testament to its capacity for sustainable growth, adding that this performance had shown that Access Bank was already delivering value of enlarged operations to stakeholders and banking industry through its series initiatives. The bank was reputed for promoting the ideals of responsible business practices and sustainable social agenda.