Access Holdings' financial performance in 2024 has underscored a compelling paradox within Nigeria’s tier-1 banking sector: the group achieved the largest asset base yet posted the weakest profitability among its peers. While its growth ambitions are reshaping the contours of banking on the continent, the financial strain of rapid expansion is becoming increasingly evident.
For the fiscal year ended 2024, Access Holdings reported a net income of ₦642.2 billion—a modest 3.7% increase from ₦619.3 billion in 2023. Though this growth in profit appears positive on the surface, it came on the back of gross earnings of ₦4.88 trillion. A deeper dive reveals a sharp erosion in profit margins, with the group’s margin dropping from 23.9% in 2023 to just 13.2% in 2024—significantly below industry standards and the lowest among Nigeria's top five banking groups.
Growth in Assets, But At a Cost
Access Holdings now holds the title of Nigeria's largest publicly listed company by total assets, which surged to ₦41.5 trillion in 2024—a 55.5% increase from ₦26.7 trillion the previous year. However, this considerable asset growth has not been matched by proportional earnings. In key profitability ratios such as Return on Assets (RoA) and Return on Equity (RoE), Access Holdings significantly lags behind its peers.
In 2024, Access posted an RoA of 1.9%, compared to UBA's 3%, Zenith Bank’s 4.1%, First Holdco’s 3.1%, and GTCO’s impressive 8.3%. A similar trend was observed in RoE: Access reported 21.6%, a steep drop from 36.2% in 2023, while competitors like GTCO and Zenith Bank posted 48.9% and 32.5% respectively.
High Earnings, Low Interest Income: A Mismatch
Despite generating the highest gross earnings in the sector at ₦4.9 trillion, Access Holdings recorded relatively low net interest income of ₦1.27 trillion—beating only GTCO in that metric. This was largely due to an elevated interest expense, which ballooned to ₦2.21 trillion—far exceeding peers like UBA (₦839.3 billion), Zenith (₦992.5 billion), and First Holdco (₦996.1 billion). GTCO, with the lowest interest expense at ₦283.2 billion, remained the most cost-efficient in this regard.
The implication is clear: while Access is moving a lot of capital, it's spending a disproportionate amount to do so. This mismatch between gross earnings and net interest income signals inefficiencies within its lending and funding structures, exacerbated by its elevated cost profile.
Rising Costs from Bold Expansion Moves
Access Holdings’ aggressive growth strategy was a defining feature of 2024. The group concluded major acquisitions including Standard Chartered's operations in Angola and Sierra Leone, Afrasia Bank in Mauritius, and a Tanzanian bank. It also secured approvals to enter Namibia, and began acquisition processes in Kenya and Uganda. Domestically, it merged Access Pensions with ARM Pension Managers to form AccessARM Pensions.
In total, Access pursued expansion activities in seven countries within the year—an ambitious strategy reflecting its continental aspirations. Yet, the costs of this expansion are mounting rapidly. The acquisition of Access Bank Tanzania alone cost ₦30.56 billion, while the ARM Pension merger involved ₦159.8 billion. Beyond purchase costs, integration and harmonization expenses—ranging from tech infrastructure to regulatory compliance—are steadily pressuring margins.
This aggressive strategy drove up the group's cost-to-income ratio to 58.3% in 2024, up from 46.9% the previous year. In comparison, Zenith Bank maintained a cost-to-income ratio of 33.3%, First Holdco stood at 44.9%, UBA at 55%, and GTCO was by far the leanest at 23.3%.
Debt-Fueled Growth and Strategic Trade-Offs
Access Holdings is also exhibiting a growing reliance on debt to fund its expansion. Its borrowings rose to ₦2.4 trillion in 2024, up from ₦1.9 trillion the prior year—higher than all peers except Zenith Bank. The group's total interest expense on these borrowings reached ₦207.8 billion.
Moreover, its revenue model is increasingly dependent on lending income, which accounted for 71% of gross earnings in 2024, up from 64% in 2023. Meanwhile, growth in non-interest income has lagged, adding pressure to diversify revenue streams and reduce exposure to interest rate volatility.
A Long-Term Bet on Continental Dominance
Despite these short-term financial pressures, Access Holdings remains steadfast in its pursuit of long-term dominance across Africa. Group CEO Roosevelt Ogbonna reaffirmed the bank’s ambitions in a 2024 statement, aiming for Access to be among the top 10 banks in its key African markets—excluding Kenya and South Africa—by 2025.
This signals a deliberate strategy focused on market share, geographic footprint, and future profitability over immediate financial gains. Whether this bold bet pays off will hinge on how effectively the bank can integrate its new acquisitions, optimize its operations, and bring down its cost base in the coming years.
In essence, Access Holdings is betting big on the future. While its 2024 results reveal growing pains and highlight the cost of its ambition, they also point to a banking group on the brink of potentially transformative growth—if it can successfully translate its size and scale into sustainable returns.