2017 First Half – Access Bank Zambia Earnings Under Water

Access Bank Office building.
  • QoQ loss marginally decreased by 2.65% to ZMW12.773million extending H1:2017 loss to ZMW25.894million;
  • Access Bank still grapples with high interest expenses on depos and credit impairments;
  • For its ZMW539million balance sheet, Access Bank, delivered an annualized -69.3% return on equity (ROE) to its shareholders;

Access Bank Zambia first half (H1:2017) earnings plummeted to ZMW25.894million as its Q2:2017 loss of ZMW12.77million extended the Q1 ZMW13.121million loss. The banks interest income for Q2 was flat at ZMW11.2million compared to Q1 propelling H1 income to ZMW22.3million. Interest expense edged 3.16% lower to ZMW7.77million in Q2 aggregating H1 expense to ZMW15.81million. Credit impairments for H1 doubled to ZMW8.87million.

The negative earnings incurred translate to a (-34.65%) half year return on equity annualized to (-69.36%) ROE to shareholders. 

“Access Bank seemed to have struggled with growing its assets in a turbulent environment. A rather systemic experience especially given economic growth slow down, high interest rates and general low business pulse. This kept the banks interest earnings either stagnant to an infinitesimal growth pace. Having booked some costly deposits on its balance sheet – in an era of liquidity crunch in 2016 – continues to penalize the bank on the interest expense side. Access Bank has also, not leveraged off foreign exchange and interest rate trading income to cushion some of the expenses incurred like other banks that we have analysed would do. The credit impairements didn’t make it any better. This resulted in negative contribution to keep earnings under water in the first half of 2017. 

Kapichila Masiye – Financial Analyst said in a weekend note.