Access Bank Nigeria Plc, the largest lender by total assets in Africa’s most populous nation, started the year with an improvement in profit, thanks to foreign exchange gains in a currency volatility terrain.
For the first three months of 2023, Access Bank’s net income or profit after tax increased by 23.91 percent to N71.65 billion as at March 2023 from N57.82 billion the previous year.
The growth at the bottom line (profit) was largely driven by a N121.38 billion foreign exchange gains, which is 30.94 percent higher than 2021’s N85.28 billion as the central bank aggressively incessant currency devaluation is a boon for lenders who have dollar denominated assets.
The Bank reported a rise in net interest income in the first quarter, as the Central Bank of Nigeria (CBN)’ rate hikes helped its bread-and-butter business-taking deposits and lending.
The central bank has raised its monetary policy rate to 18% from 17.5% in its February 2023 meeting, marking the second interest rate hike in 2023.
The decision was made due to the rising inflation rate in the economy, with headline inflation reaching 21.91% in February, the highest level since September 2005.
That is good news for interest income of banks, which is the difference between interest received from assets and interest paid on liabilities.
Access Bank has benefitted from the high interest rate environment as net interest income (NII) was up by 9.09 percent to N95.27 billion as at March 2o22 from N87.35 billion as at March 2021.