Access Bank reduces NPLs to 3.38% in 2022
Asset quality of Access Bank, as measured by its non-performing loans (NPLs), improved significantly in 2022. Non-performing loans of the banking fell to 3.38% at the end of 2022 from the previous rate of 9.9% at the end of 2021, indicating that the bank’s loan portfolio has improved in quality.
The bank, aside recording a reduction in NPLs, also reported an impressive growth in assets for the financial year ending December 2022. According to the bank’s financial statements, assets of Access Bank increased from GHS 7.4bn at end-December 2021 to GHS 10bn at end-December 2022, representing an increase of GHS 2.6bn or 35%.
The increase in assets was primarily driven by growth in the bank’s cash and cash equivalents from GHS 969m to GHS 3bn in the year under review. This represents a significant increase of over 200% and indicates that Access Bank has a strong liquidity position, which is essential for its continued growth and profitability.
However, the bank also recorded a net loss of GHS 338m in 2022 due to the government’s domestic debt restructuring program. This is a sharp contrast to the previous profit position of GHS 321m recorded in 2021, and it raises concerns about the bank’s ability to weather future economic challenges.
Access Bank’s liabilities also increased significantly by some GHS 3bn from GHS 6bn in 2021 to GHS 9bn in 2022, indicating that the bank is taking on more debt to finance its growth.
The bank’s capital adequacy ratio (CAR) increased marginally from 35.68% to 36.68% within the review period. The CAR is a critical measure of a bank’s ability to absorb potential losses, and the increase in Access Bank’s CAR is a positive sign that the bank is well-capitalized and has the financial strength to withstand economic shocks.
Access Bank has recorded impressive asset growth in 2022, driven mainly by strong liquidity. The bank’s improved capital adequacy ratio and the significant improvement in its asset quality are positive signs for the future.