ACCESS Holdings Plc’s earnings growth in the first half of 2026 came alongside rising operating costs, weakening shareholder returns and a sharp deterioration in efficiency, raising questions about the quality and sustainability of its improved profitability.
The financial services group reported a 29.2 percent increase in profit before tax to N414.1 billion for the six months ended June 30, 2026, but its cost-to-income ratio climbed to 65.2 percent from 51.7 percent at the end of 2025.
The increase means the group spent approximately 65 kobo on operating expenses for every N1 of income, compared with about 52 kobo previously, leaving a smaller proportion of income available to support profitability.
The figures are contained in Access Holdings’ unaudited half-year results released in early November, 2026.
Although the group’s gross earnings increased by 4.6 percent to N2.61 trillion, operating expenses rose by 12.1 percent to N906.7 billion, significantly outpacing revenue growth.
The development highlights the pressure that rising costs are placing on the group’s ability to convert income into profits, despite its expanding financial services operations.
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Profit growth relies heavily on lower impairment charges
A closer examination of the results shows that the reduction in impairment charges played a significant role in boosting profitability.
The group’s impairment charge fell by 70 percent to N69 billion from N230.1 billion in the corresponding period of 2025. This helped lift net interest income after impairment charges by 23.3 percent to N930.6 billion.
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However, net interest income before impairment increased by only 1.5 percent to N999.6 billion, suggesting that the improvement in underlying interest earnings was considerably weaker than the headline profit growth.
Interest income rose by 5.1 percent to N2.15 trillion, while interest expenses increased faster, by 8.3 per cent to N1.15 trillion.
The disparity limited growth in net interest income, which remains a critical earnings source for the group’s banking operations.
Net fee and commission income provided some relief, rising by 51.1 percent to N359.1 billion.
Nevertheless, the modest increase in net interest income raises questions about the group’s ability to sustain earnings growth if impairment charges begin to rise again.
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Shareholder returns weaken despite higher profits
Access Holdings also recorded a decline in returns on equity, despite reporting stronger earnings.
Its annualised pre-tax return on average equity fell to 18.3 percent from 24.4 pe cent at the end of 2025, while the post-tax return declined to 11.8 percent from 18.4 percent.
Post-tax return on average assets also dropped to 1.0 percent from 1.6 percent.
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The declining returns indicate that the group is generating lower returns relative to its equity and asset base, despite increasing profits.
This raises concerns about capital productivity as the financial services group continues to expand its operations across Africa and international markets.
The group’s shareholders’ funds increased by 2 percent to N4.57 trillion, while total assets rose by 6.8 percent to N55.24 trillion.
The slower growth in shareholder returns relative to the expansion of its balance sheet underscores the challenge of translating scale into stronger profitability.
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Foreign exchange losses add to earnings pressure
The group’s results also reflected significant losses from financial market transactions.
Access Holdings recorded a net foreign exchange loss of N37.56 billion, compared with a gain of N45.94 billion in the corresponding period of 2025.
It also reported a net loss on fair value hedge of N148.36bn. These losses weighed on operating income, which increased by only 2.2 percent to N1.39 trillion, despite stronger core operating income.
The results highlight the exposure of a diversified financial services group to currency movements and financial market volatility.
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Access Bank remains the group’s principal earnings driver
Access Bank, the group’s flagship subsidiary, contributed 96.8 percent of Access Holdings’ profit before tax during the period.
The parent company also said operations outside Nigeria accounted for 79.8 percent of Banking Group profit before tax, highlighting the growing contribution of its African and international businesses.
While the international network offers opportunities for trade finance, cross-border payments and regional expansion, the results also raise questions about whether the group’s growing scale is translating into stronger efficiency and shareholder returns.
Access Holdings said it was pursuing cost optimisation through technology, automation and process improvements.
However, the rising cost-to-income ratio and declining returns suggest that the effectiveness of those initiatives will be crucial in determining whether the group can sustain earnings growth without further deterioration in profitability metrics.
The challenge for management is no longer simply to expand the group’s assets and geographical reach, but to demonstrate that such growth can deliver better efficiency, stronger capital returns and more sustainable earnings.
