Tier-1 Banks Report 2024: Access Holdings Leads In PBSI Ranking

Access Holdings PLC has been named the leading Tier-1 Bank in the 2024 Proshare Bank Strength Index (PBSI) report, recognising its exceptional performance.

The PBSI, which assesses banks using a comprehensive set of financial metrics derived from audited financial statements for the fiscal year 2023, highlights Access Holdings’ significant progress in the banking sector.

According to Proshare’s most recent report, Access Holdings ranks first, alongside other notable institutions such as Zenith Bank, FBNH, Ecobank, UBA, and GTCO.

As the Nigerian banking industry evolves, Access Holdings stands out for its proactive approach to managing macroeconomic and microeconomic risks.

The report draws parallels with the challenges that US banks like Silicon Valley, First Republic, and Signature Banks will face in 2023 as a result of poor asset and liability management (ALM).

With the Central Bank of Nigeria’s ongoing banking sector recapitalization programme, the report emphasises the importance of investing 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 fail because they lack a deliberate strategy for transitioning from cash flow to value creation.

The report also highlighted Nigeria’s economic trajectory, stating that “Nigeria’s GDP in 2005 was N38.78 trillion and rose to 77.94 trillion, roughly two times in 2023, implying an average annual growth rate of 3.55 per cent in the last two decades.”

However, between 2000 and 2005, bank equity increased more than tenfold, or by 1,150 per cent, from N2 billion to N25 billion.

In other words, for the past decade and a half, banks have used ten times more equity in their businesses than before 2005, despite the country’s modest GDP growth.

However, the report clarifies that simply increasing the equity base of Nigerian banks does not guarantee economic growth and development.

“Transforming bank equity into economic growth drivers requires more than money; it requires a coordinated public-private sector plan, with what Proshare analysts have repeatedly described as a whole-of-government approach to policies, programmes, and processes.”

Proshare analysts examined bank performance in 2023 and discovered that banks were taking increasingly aggressive approaches to gaining digital market share while maintaining lower operating costs.