In
recognition of its outstanding performance, Access Holdings PLC has
been named the leading Tier-1 Bank in the 2024 Proshare Bank Strength
Index (PBSI) report. The PBSI, which evaluates banks based on a
comprehensive set of financial metrics derived from audited financial
statements for the Financial Year 2023, underscores Access Holdings’
significant strides in the banking sector.
Proshare’s latest
report places Access Holdings at the forefront, alongside other
prominent institutions such as Zenith Bank, FBNH, Ecobank, UBA, and
GTCO.
As the Nigerian banking sector evolves, Access Holdings
stands out for its proactive approach to addressing macro and
microeconomic risks. The report draws parallels to the challenges faced
by United States banks, such as Silicon Valley, First Republic, and
Signature Banks, in 2023 due to poor asset and liability management
(ALM).
With the Central Bank of Nigeria’s ongoing banking sector
recapitalisation programme, the report highlights the importance of
investment in financial technology, customer service scalability, and
digital asset engineering between 2024 and 2026. The analysts emphasise
that, “With higher capital levels, banks must use the larger amounts of
cash available to improve shareholder returns and customer service
experiences. Many banks will get cut at the knees by lacking a
deliberate strategy to transition from cash flow to value creation.”
The
report further highlighted Nigeria’s economic trajectory, noting,
“Nigeria’s GDP in 2005 was N38.78trillion and rose to 77.94trillion,
roughly two times in 2023, suggesting an average annual growth rate of
3.55 per cent in the last two decades. However, between 2000 and 2005,
bank equity sizes grew over ten times or by 1,150 per cent from
N2billion to N25billion. In other words, for a decade and a half, banks
have used ten times more equity in their businesses than before 2005,
yet the country’s GDP growth has been modest.”
The report,
however, clarifies that simply raising Nigerian banks’ equity base is
not a guarantee for economic growth and development. “Transforming bank
equity into drivers of economic growth requires more than money; it
requires a coordinated public and private sector plan, with what
Proshare analysts have repeatedly called a whole-of-government approach
to policies, programmes, and processes.”
Reviewing bank
performances in 2023, Proshare analysts observed that banks were
pursuing increasingly aggressive approaches to acquiring digital market
share while supporting lower operating costs (lower cost-to-income
ratios (CIRs)).
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