Access Bank Ghana Maintains Profit Levels as Cost Pressures Intensify in Q1

Access Bank Ghana Maintains Profit Levels as Cost Pressures Intensify in Q1

• Loan book expands 44%, customer deposits leap 41%, but rising expenses weigh on bottom line

Access Bank Ghana Plc has reported a relatively flat profit performance in the first quarter of 2025, with profit after tax marginally dipping to GHS 182.6 million from GHS 183.6 million in Q1 2024. This comes despite impressive growth in customer deposits and loan disbursements, underscoring the mounting pressure of operating costs in a volatile macroeconomic environment.

The bank’s topline performance saw a sharp improvement in net fee and commission income, which surged by 59% year-on-year to GHS 233.8 million. Net interest income also edged up by 9% to GHS 136.2 million, supported by a 20.5% increase in interest income. However, this was partly eroded by a 28% spike in interest expenses, totalling GHS 248.4 million, up from GHS 193.6 million in the prior year.

Operating income rose to GHS 450.8 million, a 14.3% increase from GHS 394.4 million a year earlier. Yet, operating costs surged more aggressively. Personnel expenses increased 45% to GHS 71.8 million, while other operating expenses rose 68% to GHS 71.6 million. The bank’s depreciation and amortisation charges also grew by nearly 33% year-on-year.

These cost increases weighed on pre-tax profits, which remained virtually unchanged at GHS 280.9 million versus GHS 282.5 million in Q1 2024.

Strong deposit and lending growth

Access Bank Ghana’s total assets jumped 33% year-on-year to GHS 18.25 billion, largely driven by strong growth in customer deposits, which soared 41% to GHS 14.47 billion. Loans and advances to customers also expanded significantly by 44% to GHS 3.63 billion, reflecting robust credit extension during the period.

However, the bank’s capital adequacy ratio slipped to 19.82% from 22.24% in the prior year, reflecting the faster asset expansion. Non-performing loans improved to 2.59%, down from 3.81% in Q1 2024, indicating an improvement in asset quality.

Liquidity remains strong

The bank maintained a healthy liquidity ratio of 71.77%, marginally up from 70.31% a year earlier, underpinned by the GHS 1.64 billion increase in cash and cash equivalents during the quarter. Net cash from operating activities surged to GHS 1.53 billion, driven by a substantial uptick in deposits and tighter working capital management.

Equity strengthened, but market valuation under strain

Total equity climbed to GHS 1.94 billion from GHS 1.59 billion a year ago, supported by the retained earnings buildup. However, losses in the value of investment securities increased, with the fair value reserve growing to a negative GHS 288.8 million, showing ongoing pressure from changing interest rates.

The bank’s earnings per share declined slightly to GHS 1.05 from GHS 1.06, pointing to modest dilution amid strong balance sheet growth.

NorvanReports Outlook

Access Bank Ghana enters Q2 with a strengthened deposit base and an expanded lending portfolio, positioning it for continued balance sheet growth. However, the widening gap between revenue growth and cost escalation poses risks to profitability if unchecked. Management’s ability to balance cost controls with its growth ambitions will be pivotal as macroeconomic pressures persist.

Access Bank Ghana Plc – Financial Highlights (Q1 2025 vs. Q1 2024)

(All figures in GHS ‘000s unless otherwise stated.)