Nigerian Stock Exchange ACCESS. Banking. Main Board. Commercial Banking

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1 Access Bank Q2: Strong numbers to support price. Bourse Nigerian Stock Exchange Code Name Sub Sector Banking Market Classification Main Board Nature of Business Commercial Banking Date of Incorporation February 8th 1989 Date Listed November 18th 1998 End of Accounting Year 31st December Website Registrar United Securities Limited Share (N) 5.60 Earnings per Share 1.37 Intrinsic Value(N) Share Outstanding 28,927,971,631 Market Capitalization 161,996,641,134 Brief History: Passing through various stages over the past 26 years of operation, Access Bank now ranks among the top five financial institutions in Nigeria, engaging in investment, corporate, commercial, retail and business banking. The Most Current Financial Result Access Bank made available its scorecard for the period ended June 30, 2016 to the investing community in compliance with its post listing requirement. The numbers revealed an impressive performance as against the comparable period. The table below highlighted the released figures in comparison to similar quarter in As can be seen, Gross Earnings for the period grew by marginal 10% while profit after tax was up by 26% from N31.29 billion in 2015 to N39.49 billion. Meanwhile, Total Comprehensive Income for the period stood above the comparable period by percent as a result of FX transaction differences and value change of AFS financial instrument according to the numbers posted. In all, the result turned out a good performance considering the several tight economic regime within which the financial institutions operated through the reported quarter. Financial Positions 2016(Million) 2015(Million) % CGN Cash and Cash Equiv. with CBN 612, , % Gross Earnings 185, , % Interest Income 112,292 98, % Interest Expenses 43,841 50, % PBT 50,022 39, % PAT 39,486 31, % Total comp Income 70,167 34, % Total Assets 3,277,587 2,392, % Total Liabilities 2,848,970 2,089, %

2 Total Deposits 2,179,406 1,792, % Loans & Advances 1,815,922 1,280, % Net Assets 428, , % Volatility Compared to industrial peers: Access Bank is fairly volatile, bit wn the other hand, with beta value of 0.99, it is theoretically safe to conclude that the stock's volatility is high, and thus qualifies for every trading strategy, long, medium or short term. The Total Debt to Equity is quite on the high side, especially when compared with the sectoral average. Volatility INDUSTRY Beta-β Total Debt to Equity Profitability Ratios In the face of continued tight monetary policy and unstable fiscal policy, businesses run within the country are expected to suffer sharp downturn in profitability. On the strength of the above statement, the management of Access Bank should be applauded for percentage growth achieved in profitability ratios. Interest Expenses to Gross Earnings adjusted down to 21.25% to reflect cost management of the bank. Profit before Tax Margin stood high against 2015 estimates with 16.47% variance. Profit Margin on the other hand stood high above 2015-Q2 at 21.32% against 18.55%. Return on Average Equity and Return on Average Assets both declined by a marginally 10.89% and 7.89% respectively. Profitability Ratios %CHG Interest Expense to Gross Earnings 23.68% 30.06% % PBT Margin 27.01% 23.19% 16.47% Profit Margin 21.32% 18.55% 14.94% RoAE 9.21% 10.34% % RoAA 1.20% 1.31% -7.89% Efficiency Ratio Measuring efficiency of the management of Access Bank, we have tested few ratios as shown in the tables below. Gross Earnings to Total Assets for the period is estimated at 5.65%, which is 19.86% below the 7.05% estimate of last year. Similarly, Gross Earnings to Equity went south to 43.20% since touching 55.72%. The bank's Equity Multiplier is satisfactory at 13.08%, implying that assets are mostly financed by equity and not debt. Thus, safety of investment is assured. Efficiency Ratio %CHG Gross Earnings to Total Assets 5.65% 7.05% % Gross Earnings to Equity 43.20% 55.72% % Equity Multiplyer 13.08% 12.65% 3.36% Loan to Deposit 83.32% 71.42% 16.67% Loan & Adv to Total Assets 55.40% 53.52% 3.52%

3 \ Investment Ratios Investment ratios estimated from the bank s half-year result is as shown in the table below. The amount earned per unit of shares held (EPS) is estimated at N1.37, same as was earned last year. Total Comprehensive Income per share for the period jumped to N2.43 per share, from the N1.49 reported for the corresponding period of last year. Meanwhile, comparing the said EPS to the market price of Access Bank when the result was released, we can establish that the investment achieved a yield of 24.38% from the earned amount. The Book Value per Share of Access Bank is currently N14.82, up from the N13.83, when the result was released. This confirmed investors reason for revaluing the stock to the current N5.60 as it is expected to rally on the strength of the impressive earnings performance. Investment Ratios %CHG EPS % EPSATCI % Earnings Yield 24.38% 32.01% % P/E-RATIO % P/BV % BVPS % Opex Margin 23.68% 30.06% % DIVIDEND Dividend/Share (N) % Payout Ratio 18.32% 18.29% 0.14% Sustainable Growth Rate 7.53% 8.45% % Corporate Action Dividend payout ratio is 18.32% while the sustainable growth rate is 7.53%.Total Loan and Advances is 55.40% of Total Assets. This is slightly above the 53.52% estimated in similar quarter of 2015.It was also discovered that 83.32% of Total Deposit reported for the period is currently in form of loans and advances. Dividend Yield of 4.46% for second quarter interim dividend is good and attractive for income investors. DIVIDEND/BONUS DETAILS Interim Div(N) 0.25 Bonus N/A Qualification Date 5/6/2016 Closure Date 6 September, 2016 Payment Date 13 September, 2016

4 Three Years View From the table below, it can be established that Access Bank has consistently released its full year result every second week of March. This assures of the reliability of the result. Meanwhile a scan through the observed years confirmed a growth in income with corresponding increase in expenses year-on-year. Profit on the other hand grew by over 80% in the last three years. Similarly, Total Assets, Liabilities and Net Assets maintained a steady growth as can be seen in the below table. BANK THREE YEARS FIANNCIALS FIGURES Financial Year 2015(Millions) 2014(Millions) 2013(Millions) RELEASED DATE DATE RELEASED 15/03/ /03/ /07/2014 GROSS EARNINGS 337, , ,891 INTEREST INCOME 207, , ,961 INTEREST EXPENSES 102,421 76,901 68,237 OPEX 135, , ,181 PBT 75,038 52,022 43,531 TAX 9,169 8,959 7,499 PAT 65,868 42,976 36,298 TOTAL COMP. INCOME 66,207 47,117 34,642 CASH&CASH EQUIV. 478, , ,460 TOTAL ASSETS 2,591,330 2,104,361 1,835,466 TOTAL LIABILITIES 2,223,528 1,826,950 1,590,984 NET ASSETS 367, , ,482 DEPOSIT FROM BANKS 72, ,045 72,147 DEPOSIT FROM CUSTOMERS 1,683,244 1,454,419 1,331,418 TOTAL LOANS & ADVANCES 1,408,564 1,110, ,169 BANK THREE YEARS FIANNCIAL RATIOS ESTIMATED RATIOS FINANCIAL YEAR DIVIDEND EPS(N) TCIP/SHARE PE/RATIO EARNINGS YIELD BOOK VALUE/SHARE PRICE TO BOOK VALUE PBT MARGIN PROFIT MARGIN ROAE ROAA EQUITY MULTIPLYER OPEX TO GROSS EARNINGS LOAN TO DEPOSITS Technical View

5 Access Bank on daily time frame is side trending, waiting for a trigger in the up or down direction, which suggests that the impressive numbers and interim dividend released recently is likely to push the price slightly up as market expectation is surpassed by the actual performance, when measured by the moving average. Measuring by Bollinger Band on the other hand, it is noticed that the stock still plays within the bands and has not yielded any buy signal. Fibonacci retracements revealed a possible recovery before N5.00. We therefore advice a close watch on Access Bank, meanwhile, buying the stock for dividend income is an intelligent investment decision as the board has announced N0.25 dividend. Conclusion/Recommendations The share price of Access Bank is quite volatile and may be played by traders only after a clear view of the trend. Fundamentally, the equity is strong, the half-year statistics stand strong in determining the next direction of its share price. The quarterly earnings so far reported are strong and impressive to support price, for investors, it is okay to position for the dividend. Management on the other hand, will need to come up with more workable strategies capable of positioning the bank at competitive advantage in the industry and increase payout ratio to create more value for shareholders.