Access Bank shifts focus to returns after years of expansion

Access Holdings Plc, parent company of Access Bank, faces a critical test: whether its acquisition-led expansion can translate into stronger shareholder returns, as rising provisions, declining return on equity, and suspended dividends challenge its growth strategy.

The Group, which has built one of Africa’s largest banking networks through acquisitions and international expansion, is shifting its focus from growing its footprint to improving profitability and extracting greater value from existing businesses.

With total assets of N51.56 trillion at the end of 2025 and profit before tax exceeding N1 trillion, Access Holdings has achieved significant scale. However, its 2025 results reveal the challenge of converting that growth into sustainable returns.

The Group’s cost-to-income ratio improved from 56.7 percent to 51.7 percent, indicating better operating efficiency. However, return on average equity declined to 18.4 percent from 21.6 percent, reflecting higher impairment charges as management accelerated provisions on legacy loans and exposures previously covered by regulatory forbearance.

The performance highlights the central question facing investors: can Access Holdings sustain earnings growth while improving asset quality and delivering stronger returns on shareholders’ capital?

In a statement seen by BusinessDay, management described its next phase as a shift “from scale to value” to strengthen earnings per share and consistently deliver returns on equity above the cost of capital.

Dividend resumption becomes a key test

The Group’s dividend position has emerged as an important measure of its ability to translate earnings into shareholder value.

Access Holdings did not declare a dividend for the 2025 financial year amid outstanding regulatory requirements. Its board said the decision did not reflect weaker business performance and indicated that payments could resume once the relevant conditions are met.

“The distinction between reported profits and distributable cash is crucial. Subsidiaries must retain sufficient capital to meet regulatory requirements and fund operations before transferring earnings to the holding company,” the statement disclosed.

Consequently, dividend resumption will depend not only on profitability but also on regulatory clearance and the capacity of subsidiaries to remit funds.

A return to dividend payments would signal progress in rebuilding distribution capacity. However, investors will also want evidence that such payments can be sustained without weakening capital adequacy or restricting profitable growth.

African subsidiaries strengthen earnings
Access Holdings’ international operations are becoming increasingly important to its earnings profile.

Pre-tax profit from subsidiaries elsewhere in Africa rose to approximately N284 billion in 2025 from N201 billion in 2024, representing growth of about 41 percent. Access Bank DR Congo doubled its net profit over the period.

Operations outside Nigeria now account for close to half of the Group’s segmental pre-tax profit, according to the statement.

The international network offers opportunities to generate income from trade finance, cross-border payments, foreign exchange, and cash management. However, maintaining operations across multiple jurisdictions also introduces regulatory, currency, and operational risks.

The challenge is to ensure that each subsidiary generates returns commensurate with the capital invested. Where businesses consistently underperform, restructuring or partnerships may be necessary to improve capital efficiency.

Nigeria remains central to recovery
Nigeria remains the Group’s core market, where pre-tax profit increased by 8 percent in 2025 despite higher provisions and pressure on interest margins.

Rather than relying on major acquisitions or extensive branch expansion, Access Holdings can improve earnings by deepening relationships with existing customers and expanding fee-based services.

Its non-banking businesses, including Access Pensions, Access Insurance Brokers and Hydrogen Payments, offer opportunities to diversify income, while Oxygen X Finance focuses on digital consumer lending.

However, these businesses must generate sufficient revenue to justify their operating costs and capital requirements. Growing customer numbers or expanding lending will not create value if funding expenses and credit losses absorb the additional income.

Investors seek stronger returns
Over the next two to three years, investors will closely monitor whether Access Holdings can sustain returns on equity above its cost of capital, further reduce its cost-to-income ratio and bring loan-loss charges back towards normal levels.

They will also assess whether fee-based businesses contribute a larger share of earnings and whether the Group provides clearer disclosure of subsidiary performance.

Ultimately, Access Holdings has demonstrated its ability to build a large financial services group. Its next challenge is to show that the enlarged franchise can generate consistent returns and restore dependable shareholder distributions.

The group has built the platform. The test now is whether it can make that platform deliver lasting value for shareholders.