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Access Holdings Plc will resume dividend payment this year, an optimism underpinned by a capital structure adjustment and a last resort capital raising, which will help annihilate a N10.99 billion shortfall linked to a breach in regulation, according to a report by Chapel Hill Denham.
For the first time in a decade, Access Holdings did not declare an interim dividend following the release of its half year (H1-25) results,” said analysts at Chapel Hill Denham.
“This development, however, was not linked to regulatory forbearance, but to non-compliance with Section 7.1 of the Prudential Regulation of Financial Holding Company Groups (HoldCos), which requires a HoldCo’s minimum paid-up capital to exceed the combined minimum paid up capital of all its subsidiaries,” said analysts at Chapel Hill Denham.
The Bank said failure to meet this requirement led to a short fall of N10.99 billion as it has decided to restructure the nominal share price to realign the paid-up capital position or issuing additional shares to augment the capital base.
It is worth noting that the central bank had directed that lenders with exposure to forbearance were not allowed to pay dividends to their shareholders so as to protect their capital and make them impervious to macro shocks.
The reclassification of loans due to exposure to forbearance has resulted in increased provisioning for loans as lenders have reclassified such loans.
Investors are sanguine that Access Holdings will reward them from distributable profit. For instance, the lender’s dividend yield stood at 10.87 times as its shares trade at a price to earnings ratio of 1.65 times.
So far, it has raised N351.01 billion, making new core capital of N594.82 billion, according to data from Chapel Hill Denham.
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