Access Corporation, the parent company of Nigeria’s largest bank by assets, has achieved significant success across its various subsidiaries. In particular, the company’s fintech, pension, and lending ventures have demonstrated profitability within two years of incorporation.
This uptick indicates the resounding success of Access Corporation’s overall strategy since moving to a holding company structure in 2020 and complying with the Central Bank of Nigeria (CBN) 2014 regulation of Holdcos.
For the first nine months of 2024, Access Corporation subsidiaries have contributed a combined profit of ₦12.76 billion ($7.65 million) to the group. These contributions have seen the parent company triple its gross earnings to ₦3.41 trillion ($2 billion) as of September 2024 from ₦1.38 trillion ($832 million) in December 2022, when full disclosure commenced regarding the subsidiaries’ financial position.
Profitability for the group also stands at ₦457 billion ($274 million) in the 9 months of 2024 from ₦152 billion ($91 million) in December 2022, up 199%.
Hydrogen, Access Holdings’ fintech arm, has made substantial strides since its inception. The company has turned a profit in just two years, driven by increasing transaction volumes, a growing partner base, and operational efficiency.
Reeling from a loss of ₦883 million ($529,886) in September 2023, the fintech rebounded in the nine months of 2024, recording ₦1.45 billion ($848,940) in profits and ₦5.68 billion ($3.32 million) in operating costs.
Hydrogen competes with fintech players such as GTCO’s Squad, Flutterwave, Moniepoint, Stanbic IBTC’s Zest, and Paystack. It is the only fintech arm among Nigeria’s five biggest banks to post billions in profit within 24 months. Zest Payments, a Stanbic IBTC fintech company has yet to turn a profit since its unveiling in October 2023. Fintechs in the country have equally struggled to turn profitable, optimising for cash efficiency instead.
“Hydrogen’s financial growth is driven by increasing transaction volumes, an expanding partner base, and a strong focus on operational excellence,” a company spokesperson from Hydrogen told Condia via a statement. “The stability of Hydrogen’s infrastructure has been a key factor in attracting and retaining partners.”
Hydrogen offers products and services, including InstantPay, Payment Gateway, POS, Card, and Switch services. In 2023, Hydrogen said it processed approximately ₦15 trillion ($8.97 billion) in transactions across its different channels.
The fintech company claimed to process transactions for about 50% of the five largest banks in Nigeria and top fintechs, accounting for its ability to report trillions in transaction volumes.
Access-ARM Pensions and Oxygen X deliver strong results
In the first quarter of 2024, Access Corporation made an ambitious move to bolster its pension, insurance and lending arm. In January 2024, Access Bank’s parent company finalised the acquisition of ARM Pensions, Nigeria’s second-largest independent pension fund manager with over $2 billion of pension assets under management (AUM). The move has seen Access Corporation integrate ARM Pensions with its existing pension business, to challenge Stanbic IBTC for market leader status. The combined entity, Access-ARM Pensions reported ₦24.85 billion ($14.87 million) in operating income and profit before tax of ₦10.24 billion ($6.13 million), a spokesperson from the parent company told Condia.
Similarly, at the beginning of the year, Access Corporation gained approval to establish Oxygen X, a standalone lending company. A standalone lending app implies that Oxygen can acquire users beyond Access Bank customers.
While other holding companies in the financial services space have focused on fintech plays (GTCO has Squad, Stanbic has Zest, and Access has Hydrogen); Oxygen X represents Access Corporation’s attempt at being a pioneer in spinning off a digital lending company to compete with the likes of Carbon, Opay and Palm Pay.
Sources have maintained that Oxygen X is not an entirely new product for the HoldCo; having an initial name as Quickbucks app—yet the company still recorded profits in the first year of launch.
Oxygen X posted profits of ₦421 million ($246, 146) by the end of nine months of 2024 and an impressive ₦2.12 billion ($1.24 million) in operating profits.
Sources close to the company linked Oxygen X’s profitability to a rising demand for digital loans. They also noted that the subsidiary recently undertook a software upgrade to bolster offerings like device, solar, car and payday loans.
Access Insurance Brokers Limited
Another bright spot for Access Corporation is the newly established insurance arm, Access Insurance Brokers Limited which recorded ₦641 million ($383,738) profit in September 2024 and ₦827 million ($495,088) in operating income.
These strong performances from Access Holdings’ subsidiaries highlight the successful implementation of the company’s strategy of diversifying its revenue streams and investing in potential high-growth sectors.
The parent company plans to expand operations to 26 countries over the next five years, including new markets in the United States, France, Hong Kong, Malta, and several African nations.
Last week, Access Bank UK, a subsidiary of Access Corporation unveiled its moves to acquire a majority equity stake in Afrasia Bank, Mauritius’ fourth largest bank by total assets.
