Access Holdings loses N103bn as investors reprice banking giant

Nigeria’s largest lender by assets, Access Holdings Plc, lost N103.3 billion in market value as investors continued to sell the stock amid concerns over earnings quality, delayed dividend payments and growing pressure to close the valuation gap with its banking peers.

The financial services group, which remains the country’s biggest bank by total assets, saw its market capitalisation decline to N1.24 trillion, representing a 7.7 per cent loss in value as investors rotated into better-performing banking stocks.

The sell-off has left Access Holdings trading at a steep discount to its historical valuation, with the stock currently about 37 per cent below its 52-week high on the Nigerian Exchange.

With 54.38 billion outstanding shares, the group is now valued at N1.239 trillion, despite maintaining the largest asset base in the Nigerian banking industry.

The decline comes at a time when investors are increasingly rewarding banks that have delivered stronger earnings growth, superior dividend payouts and higher returns to shareholders.

Market analysts said the stock’s underperformance reflects concerns over shareholder value creation, particularly as rival tier-one banks have recorded stronger capital appreciation and dividend returns.

Although Access Holdings remains one of the most actively traded banking stocks on the Nigerian Exchange, sustained selling pressure has weighed on its valuation.

The stock has struggled to maintain the momentum that followed its expansion across Africa, with investors increasingly focusing on profitability, capital efficiency and returns rather than asset size.

Analysts at CardinalStone Securities said the 2025 financial year marked a strategic turning point for Access Holdings as the group shifted from aggressive expansion to a stronger emphasis on value creation.

The investment firm noted that the company is moving away from acquisition-driven growth following regulatory restrictions and is now focusing on earnings quality, operational efficiency, capital optimisation and sustainable shareholder returns.

Access Holdings’ dividend challenges also contributed to investor concerns.

The group’s interim dividend was not approved because the holding company’s paid-up capital was below the aggregate minimum capital requirements of its subsidiaries, contrary to regulatory guidelines governing financial holding companies.

The issue was later addressed through a private placement at the holding company level.

However, the final dividend payment was also withheld after regulators raised concerns over the group’s foreign banking investments, which exceeded the limits prescribed under the Banks and Other Financial Institutions Act.

According to analysts, Access Holdings’ investment in foreign banking subsidiaries currently represents 19.4 per cent of shareholders’ funds, above the regulatory limit of 10 per cent.

The group has been granted a 12-month period to rectify the position through additional capital raising, reduction in foreign investments, or a combination of both measures.

Despite these challenges, analysts remain optimistic about the bank’s long-term prospects.

CardinalStone Securities maintained a buy recommendation on the stock and raised its 12-month target price to N52.14 from N45.12.

Using a reference price of N25.30, the revised target price implies a potential upside of more than 106 per cent.

The investment house, however, assumed no dividend payment in 2026 in its base-case scenario, although it noted that a quicker resolution of the regulatory issues could support a dividend payout ratio of about 30 per cent.

Access Holdings reached an all-time high of N36 per share, while market data show the stock has yet to trade above N40 since listing.

Analysts said the bank’s next phase of growth will depend largely on its ability to improve profitability, strengthen capital buffers, resolve regulatory concerns and restore investor confidence.

As Nigeria’s banking sector moves into a recapitalisation cycle, investors are increasingly rewarding institutions that combine strong earnings growth with consistent dividend payments, placing additional pressure on Access Holdings to translate its large asset base into stronger shareholder value.