U a ~ ~ ·~ ACCESS BANK PLC 0.0 ~ © COPYRIGHT 2012 AGUSTO & CO

~ ~ u a ~ ~ ·~ ACCESS BANK PLC 0.0 ~ © COPYRIGHT 2012 AGUSTO & CO. LIMITED ~ ALL RIGHTS RESERVED ·~ ~ The copyright of this document is reserved by Agusto & Co. ~ Limited. No matter contained herein may be reproduced, a ~ duplicated or copied by any means whatsoever without the prior written consent of Agusto & Co. Limited. Action will be taken ~ against companies or individuals who ignore this warning. ~ C/J ~ The circulation of this document is restricted to the subscriber to whom it has been addressed. Any unauthorised disclosure or ~ use of the information contained herein is prohibited. ~ C",J Oo~ ~ Agusto & 'Co. RESEARCH,~DITR ATINGS,,CRE!JII;RISK MANAGEMENT_ RATING RATIONALE

Agusto & Co. hereby upgrades the rating of Access Bank Plc ("Access" or "Access Bank") to"A-". The upgrade is supported by Access Bank's improved market position, adequate capitalisation and good liquidity profile. However, Access Bank's strengths are constrained by deterioration in asset quality during the year ended 31 December 2011. The rating also takes into account potential short-term integration challenges, which could temper business growth.

Access ranks among the five largest banks in Nigeria by total assets & contingents. On account of consolidation with Intercontinental Bank Plc in October 2011, Access Bank's balance sheet grew twofold to N2.05 trillion as at year ended 31 December 2011. Despite strong growth in assets, Access Bank's Basle ratio (though lower than the prior year) remained adequate at 22%. The Basle ratio is above the regulatory minimum of 15% for an inter RATING national commercial bank. When subjected to our stress test, the Basle ratio stood at 17%, which remains ac ceptable. We believe Access Bank's capital is adequate for business risks. ACCESS BANK PLC Rating assigned: A Access Bank's liquidity and funding profiles are, in our opinion, strong. Funding has been strengthened by an Outlook: Stable enlarged branch network following consolidation, which has availed Access Bank a vast pool of low-cost de posits. In the year under review, local currency deposits grew by 114% to N871 billion. Deposits adequately Issue date: 15 May 2012 funded the loan book and Access Bank's liquidity ratio stood at 74% as at 31 December 2011, well above the Expiry date: 30 June 2013 regulatory minimum of 30%. Notwithstanding, Access Bank's dependence on wholesale funding, which cur Previous rating: "Bbb" rently accounts for 70% of deposits, is of moderate concern. Access Bank's strengthened distribution network should, in our opinion, aid funding diversification and enhance capacity to execute larger transactions. Access Bank is active in the Nigerian money market and has access to long-term funding from foreign financial institu tions.

Despite a spike in costs during 2011, Access Bank's profitability improved marginally, supported by significant growth in business volumes. In the year under review, Access Bank's pre-tax return on average equity (ROE) improved to 10.9% (2010: 9.4%). Though we expect profitability for Access Bank to improve moderately as op erations stabilise, we note that competitive pressures in the corporate segment (Access Bank's niche area), as well as the subdued business environment could temper growth.

Asset quality deteriorated during the year under review, partly due to classified loans acquired from Intercon tinental Bank. The ratio of non-performing loans to total loans (at 9.4%) was higher than selected peers, as well as the Central Bank of Nigeria's 5% recommended threshold. Although Access Bank has provided aggressively ANALYSTS for classified loans (with coverage at 89% by year-end), we remain concerned about asset quality especially Babajide Onifade given the increase of 57% in NPL despite the sale of a significant portion to the Asset Management Corporation babaii [email protected] of Nigeria. Edward Olajide [email protected] Prior to acquisition, Intercontinental was a large commercial bank with over 4,000 staff and 342 branches. Al though consolidation in a short time frame has been largely successful, we believe Access Bank's ability to suc UBA House (5th Floor) cessfully run the merged entity remains to be seen. Nonetheless, on account of Access Bank's improved liquid 57 Marina. ity & liability generation, we hereby upgrade the rating of Access Bank to"A-" +234 12707222-4 Strengths Challenges • Good liquidity • Curtailing further increase in non-performing loans • Enhanced distribution network & client base • Ensuring that the merger process is well managed

Weaknesses • Significant obligor concentration in the loan book • Growing level of non-performing loans

Bank Ratings FINANCIAL DATA December 2011 December 2010 ©COPYRIGHT 2012 Total assets & contingents N2.05 trillion Nl .04 trillion AGUSTO & CO. LIMITED Total local currency deposits N871 billion N407 billion

Net earnings N94 billion N65 billion

Pre-tax return on average assets & contingents (time-weighted) 1.7% 1.8%

Pre-tax return on average equity (ROE) 10.9% 9.4% Page I The copyright of this document is reserved' by Agusto & Co. Limited. No matter contained herein may be reproduced, duplicated or copied by any means whatsoever without the prior written consent of Agusto & Co. Limited. Action will be taken against companies or individuals who ignore this warning. The information contained in this doCument has been obtained from published fincincial statements and other sources which we cons ider.to be reliable but ·do not gu'arantee as such. The opinions expressed in tHis document do not represent investment or other advice and sh~u·J d therefore not•be constrUed as such. : Agusto &Co. RESEARCH,CREDIT R AT/NGS, CREDII;RISK MANAGEMENT Directors Shareholding (%) • Gbenga Oyebode (Chairman) 0.72 (Direct & Indirect) • Aigboje Aig-Imoukhuede (Group Managing Director) 3.04 (Direct & Indirect) • Herbert Wigwe (Group Depuhj Managing Director) 3.04 (Direct & Indirect) • Obeahon Ohiwerei (Executive) 0.06 (Direct & Indirect) • Taukeme Koroye (Executive) 0.01 • OkeyNwuke (Executive) 0.03 • Ebenezer Olufowose (Executive) 0.02 • Victor Etokwu (Executive) Nil • Cosmas Maduka 1.90 (Direct & Indirect) • Oritsedere Otubu 0.17 (Direct & Indirect) • Babatunde Folawiyo 1.86 • Mosunmola Belo-Olusoga 0.01 • Aflthonia Ogunmefun Nil • Emmanuel Chiejina (Independent) 0.03 • Mahmoud Isa-Dutse (Independent) 0.015 10.91

Significant Shareholder *Stanbic Nominees Nigeria Limited 19.43 *Held in

Mr. Herbert Wigwe joined Access Bank in March 2002 as the Deputy Managing Director. Prior to joining the Bank, he worked with Guaranty Trust Bank Plc, where he rose to the position of Executive Director. During his tenure at Guaranty Trust Bank, he was responsible for the commercial and corporate banking business segments. He holds a B.Sc. in Accountancy from the University of Nigeria, Nsukka. He also holds a Masters degree in Banking & International Finance from the University College of North Wales and a Masters degree in Financial Economics from the University of London. Mr. Wigwe is an alumnus of Harvard Business School and a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN).

Other members of the senior management team are: Okey Nwuke Executive Director- Institutional Banking Group Ebenezer Olufowose Executive Director - Investment Banking Group Taukeme Koroye Executive Director- Operations & Technology Obeahon Ohiwerei Executive Director - Commercial Banking Group Victor Etuokwu Executive Director - Transaction Services & Information Technology Division Obinna Nwosu General Manager - Divisional Director, Retail Banking Division Roosevelt Ogbonna General Manager - Divisional Head, Commercial Banking Division Speedwell Ngoka General Manager- Regional Head, Commercial Banking North East Banjo Adegbohungbe General Manager - Group Head, Global Trade and International Payments Gregory Jobome General Manager- Chief Risk Officer, Enterprise Risk Management Group Pattison Boleigha General Manager- Group Head, Group Compliance and Internal Control Adeyemi Odusanya General Manager - Group Head, Commercial Banking South West Angela }ide-Jones General Manager- Group Head, Private Banking Bolaji Agbede General Manager - Group Head, Human Resources Innocent Ike General Manager - Group Head, Federal Capital Territory Kalu Agwu General Manager- Group Head, Branch Services Group Tunde Coker General Manager - Chief Information Officer Ashok Kumar General Manager- Senior Banking Advisor Peter Iwegbu General Manager -Group Head, Information Technology Ojinika Olaghere General Manager - Group Head, General Resource Management

Page 2 . _ . . The copyright of this document is reserved' by Agusto & Co. Limited. No matter contained herein may be reproduced, duplicated or copied by any means whatsoever without the prior written consent of Agusto & Co. Limited. Action will be taken against companies or ind ividuals who ignore this warning. The information contained in this doCument has been obtained from published fimi.ncial statements and other sources which we consider.to be reliable but -do not gu'arantee as such. The opinions expressed in th'1s document do not represent investment or other advice and shou'ld therefore not•be constrUed as such. · Agusto &Co. RF"~AnrurnJ:n1Tn ATmr.~; rRJ:nJTRTI:.:J(MANAf:.F'MFNT BANK PROFILE Access Bank Pic was incorporated in Nigeria as a private limited liability company on 8 February 1989. Access Bank began opera tions in May 1989 and was converted to a public company on 24 March 1998. Access was listed on the Nigerian Stock Exchange (NSE) in November 1998, and issued a universal banking license by the Central Bank of Nigeria (CBN) in February 2001. In line with new CBN guidelines on the "Scope of Banking Activities', Access Bank has opted to continue operations under an interna tional commercial banking license.

Access has undertaken a number of acquisitions since the increase in regulatory minimum capital requirements for Nigerian banks. In October 2005, as part of efforts to shore up capital, Access Bank acquired Marina Bank Limited (a small-sized merchant bank) and Capital Bank Limited (a mid-sized commercial bank). In October 2011, Access also acquired a 75% controlling stake in Interconti nental Bank Pic, a retail bank with 342 branches, N699 billion in total assets and N523 billion in core deposits as at 30 September 2011. This acquisition gives Access control of Intercontinental's resources, providing Access Bank a wider funding base and distribution network. Following acquisition of Intercontinental Bank, Access recorded a threefold increase in branches to 348 at the end of the first quarter ended 31 March 2012.

Access has a large and diversified shareholder base comprising over 900,000 investors. No single entity directly controlled up to 5% of Access Bank's disclosed shareholding as at the balance sheet date. However, one custodian (Stanbic Nominees Limited) holding shares on behalf of various investors, controlled 19.43% of Access' equity. The custodian holds no beneficial interest in these shares.

Access Bank's 15 member board of directors comprises 7 executive and 8 non-executive directors who have a diverse mix of com mercial business experience. In the year ended 31 December 2011, Mrs. Anthonia Ogunmefun (a legal practitioner and former banker) was appointed a Non-Executive Director in place of Dr. Adewunmi Desalu, who resigned his position on the board in Janu ary 2011. Subsequent to the balance sheet date, Mr. Victor Etokwu (formerly a General Manager) was also appointed an Executive Director within Access Bank. Members of the board control (directly & indirectly) 10.91% of Access Bank's equity.

Business strncture and strategy Access Bank has a large customer base. Access Bank caters to individuals, commercial companies, large & medium sized corporates and multinationals. Access Bank's service offerings include current and deposit accounts, electronic banking services, trade finance, foreign exchange services and loans. Access Bank's borrowing clients are predominantly from the upper-middle and top tiers of various economic sectors. Over the years, the focus has largely been on wholesale banking, hence more than half of exposures are loans to corporate clients.

Access Bank's corporate office is located at Plot 999c, Danmole Street, Victoria Island, Lagos. Operations are organised into four core business divisions (Institutional Banking, Commercial, Retail and Financial Markets Divisions), which are overseen by members of the senior management team.

Access Bank's medium term goal is to be one of Nigeria's three largest banks. To achieve this goal, management intends to strengthen retail deposit mobilisation as a means of supporting corporate and commercial banking activities. Access intends to lev erage Intercontinental's foothold in the retail space to enhance Access Bank's reach and also grow market share. In addition, man agement has identified cross border intermediation (notably trade finance) as a key area of growth for Access Bank. Access has se cured trade finance facilities worth over US$680.5 million from foreign correspondent banks to enhance capabilities in this area. Access Bank expects trade finance to contribute an annual average of 10% to earnings over the next 5 years.

Subsidiaries & Associates On 14 October 2011, Access Bank Pic acquired a 75% majority interest Intercontinental Bank Plc, one of 8 banks bailed out by the CBN following the 2009 audit of Nigerian banks. With this development, Intercontinental Bank (as well as 3 bank and 9 non-bank subsidiaries) became a subsidiary of Access Bank Pic. Access also has indirect shareholding in 3 associate companies through Access Bank's stake in Intercontinental Bank. Prior to the financial year-end, Access Bank discontinued operations of 3 subsidiaries in effort to comply with new CBN guidelines on the 'Scope of Banking Activities'. This rule requires commercial banks to divest from non banking businesses or adopt a holding company structure.

As at 31 March 2012, Access Bank had 13 banking and 8 non-bank subsidiaries located in 9 African countries (including Nigeria), as well as the United Kingdom. Integration of Intercontinental Bank was concluded during Q1 2012. In addition, Intercontinental Bank Ghana has been combined with Access Bank Ghana through a scheme of merger.

To further streamline operations and comply with current banking rules, Access intends to discontinue operations of 5 non-bank subsidiaries acquired from the business combination (Intercontinental Securities Limited, Intercontinental Finance & Investment

Page 3 • .. . The copyright of this document is reserved· by Agusto & Co. Limited. No matter contained herein may be reproduced, duplicated or cOpied by any means whatsoever without the prior written consent of Agusto & Co. Limited. Action will be taken against companies or individuals who ignore this Warning. The information contained in this document has been obtained from published financial statements and other sources which we consider,to be reliable but do not guarantee as such. The opinions expressed in th'is document do not represent investment or other advice and shou·Jd therefore not•be construed as such. · : Agusto &Co. RESEARCH,CREDIT RATINGS, CREDIJ;RISK MANAGEMENT BANK PROFILE CONT'D Limited, Intercontinental Trustees Limited, Intercontinental Registrars Limited and Intercontinental Capital Markets Limited). In addition, Access Bank will divest its holding in Intercontinental Bank (UK) Limited, Blue Microfinance Bank and Intercontinental Homes & Savings. Although regulations demand that banks conclude all divestments by May 2012, Access has secured a one year extension from the CBN to complete this process on account of its acquisition of Intercontinental Bank. Upon conclusion of the restructuring exercise, management expects that Access Bank will have complied with the current banking rules.

Table 1: Subsidiaries Entity Staius Ownership stake Access Bank, Cote d'Ivoire Bank subsidiary 94%, A.c,;cess Bank, qru:nbia!' Bank ;,ubsidiary 87~ Access Bank, Ghana Bank subsidiary 95% Access Bank, R.D. Congo Bank subsidiary 100% Access Bank, R-wanda Bank subsidiary 75% Access Bank, Sierra Leone Bank subsidiary 98% Access Bank, UK Bank subsidiary 100~ . A.c.;ess Bank, Zantbia Bank s~bsidiary 100% F inbank, Burundi Bank subsidiary 87%, Intercontine::t:ltal Bank Plc Bank subsidiary . 7?0/o I ntercontinental Bank UK Bank subsidiary 100% • Intercontinental Bank Gha>na Bank subsidiary 90% Intercontinental Homes & Savings Bank subsidiary 52%

Flexmore Technologies Linl.ited Non-bank subsidiary 100% Intercontinentct-1 Capital Markets Non-bank subsidia.ry 63°/q Intercontinental Finance & l n v esb:n.ents Non-bank subsidiary 100% Intercontinental Properties Non-bank subsidiary 100% Intercontinental Registrars Non-bank subsidiary 100% Intercontinental Securities Non-bank subsidiary Slo/o I ntcrcontinentaJ Trustees Non-bank subsidiary 100% Intercontinental ~apic InsUrance Noii.-bank subsidiary 58%

Associated Qiscount House Associate 47°/o Blue Microfinance Bank Associate 35°/o ' Magnate Tec~ologies As~ociate 40%.

Information Technology Access currently runs a core banking application (Flexcube), as well as 20 ancillary applications to support various aspects of the business. In order to ensure seamless service delivery to clients, Access Bank has migrated Intercontinental.Bank' s customers onto its co~e banking application.

A~cess Bank's transactions a!e processed on•the 'Flexcube Retail 6.2' and 'Flexcube Corporate 3.4' banking applkations. These applications interface with e-delivery systems that facilitate deployment of multiple clelivery channels including mobile devices and tli.e internet. Other ancillary applications: used by Access Bank incltide 'Kastle' software for treasury and market risk opera~ tibns, '.Fintrack' for financial·performance management; 'Flex ·Finance' for IFRS applicati0ns and 'Human Manager~ .· for HR man agement. In addition, service delivery capabilities are enhanced by a network of 1,600 active Automated Teller Machines (ATM)' and 8,480 Point of Sales (PoS) terminals distributed nationwide.

Access Bank maintains separate prit;tary and secondary data ce!lters in Victoria Island (Lagos), as well as a Disaster. Recovery Cen tre (DRC) at Alausa (Lagos): The DRC is connected to the data centers via dedicated fiber links. Brancli.es are linked to the head office and to·one another through dial-up or leased lines, VSAT communkation systems and radio links.

Correspondent 'Banks :Access Bank mainta!ns con' e~pondent banking relatiorls.hips with: Access J?ank (lH(); Baitk of Beirut (JJK); Ba:rili. of China; Byblos, Bank (UK); BNP Paribas (Paris); Citibank (UK & USA); Commerzbank (Germany); Credit Suisse (Switzerland); Danske Bank (Germany); Deutsche Bank (UK); FBN Bank (UK); HSBC (South Africa); ING (Belgium); International Finance Corporation (USA); JP Morgan Chase (UK); KBC Bank (Belgium); Mashreq Bank (UK); Nordea Balli< (UK); Standard Bank (South Africa); Standard Chartered Bank (UK); ,Sumitomo Mitsui Banking !=orporation (UK); Svenska .Handelsbanken (Sweden); ~S (Switzerland); Union Bank (UK); United Bank for Africa (USA); WestLB (Germany) and Zenitli Bank (UK). . I . 0 I 0 I Overv.iew of Financial.Performance ('>.s at y~ar ended 31 Dece~ber 201,1, Access Bank had .a. balan.ce sheet footing of ~2.05 tr~lion, up .97% over ~e prevJous year fol lowing acquisition of Intercontinental Bank. Capitalization ratios for Access Bank remain adequate, eviden~ed by a·Basle ratio ofi 22%. However, credit quality deteriorated in the period under review, with non-performing loans (NPL) rising to 9.4% of total loans as at year-end (2010: 7.7%).

Page4 • . . The copyright of this document is reserved' by Agusto & Co. Limited. No matter contained herein may be reproduced, duplicated or copied by any means whatsoever without the prior written consent of Agusto & Co. Limited. Action will be taken against companies or individuals who ignore this warning. The information contained in this doCument has been obtained from published financial statements and other sources which we consider.to be reliable but do not gu'arantee as such. The opinions expressed in th'is document do not represent investment or other advice and shmild therefore not•be constrUed as such. · : Agusto &Co. RESEARCH,CRE_DIT R ATINGS,CREDIJ;RISK MANAGEMENT_

ANALYSTS COMMENTS . •

OUR ANALYSIS OF ACCESS BANK FOR THE YEAR ENDED 31 DECEM Access Bank's exposures as at year-end 2011 were largely to the BER 2011 IS BASED ON FINANCIAL RESULTS FOR THE ACCESS BANK general commerce, oil & gas, manufacturing and telecommunica GROUP, WHICH COMPRISES ACCESS BANK PLC AND ITS SUBSIDIAR tion sectors. These 4 sectors jointly accounted for a moderate 57% IES. THIS WAS IMPERATIVE FOLLOWING THE 75% ACQUISITION OF INTERCONTINENTAL BANK PLC. THE MERGED ENTITY ACCOUNTS of loans. Within certain sectors, loans are distributed across vari FOR APPROXIMATELY 80% OF THE GROUP'S ASSETS AND 99% OF ous segments, further reducing concentration risk. PRE-TAX PROFIT. THEREFORE, WE BELIEVE THE GROUP'S AC COUNTS ADEQUATELY REFLECT THE POST-MERGER POSITION OF ACCESS BANK. ALTHOUGH WE HAVE USED THE GROUP'S ACCOUNT Access Bank has predominantly maintained a wholesale credit FOR THIS ANALYSIS, OUR EMPHASIS IS ON THE BANKING BUSINESS focus, with exposures to corporate entities accounting for a sig OF THE GROUP. nificant 67% of loans. Historically, this has helped uphold credit quality, as corporate obligors are considered to be low risk rela ASSET QUALITY tive to retail clients. Access Bank's strategy for corporate loans is to build a diversified pool of high quality credits based on well Access Bank had a balance sheet footing of N2.05 trillion as at year articulated ratings and risk acceptance criteria. Management en ended 31 December 2011. This represents a significant growth of sures internal ratings are refined regularly to reflect changing 97% over the prior year, following the acquisition of Interconti economic fundamentals. As at year-end, approximately 88% of nental Bank Plc. As at year-end, the two largest contributors to gross loans had undergone risk ratings; 65% were adjudged by the Group's asset base were Access Bank Nigeria Plc (46%) and Access Bank to have at least acceptable credit quality. Intercontinental Bank Plc (34%).

During the year under review, there was a significant shift within Figure 2: Distribution of loan book by customer type

asset classes in line with business combination and sale of non Financial Retail performing loans to the Asset Management Corporation of Nige Markets 2% ria (AMCON). Liquid assets, mainly comprising AMCON bonds, grew almost threefold to N658 billion, making-up the largest earn ing asset class at 32% (2010: 17%). Though a huge exposure, our concern is mitigated by the Federal Government's guarantee on these bonds. Access Bank's other key asset classes as at year-end were loans & advances (31%) and contingents (20% ).

Access Bank's business and lending strategy is hinged on lever aging existing corporate relationships to bank the broader value chain of clients. Access lends predominantly to upper-middle and top-tier obligors in key sectors of the economy. Access Bank's Obligor concentration in the loan book remains relatively high, loans predominantly comprise overdrafts, term loans, distributor with the twenty largest exposures accounting for a sizeable 51% of credit plans, trade finance credits and note issuance facilities. loans as at year-end. Though these obligors are mostly large na During the year under review, the loan book grew by 30% to N633 tional corporates, only half of the top 20 exposures are to entities billion, with a sizeable share of loans being short-term trade fi Agusto & Co. considers investment grade borrowers. The balance nance facilities extended for the importation of consumer goods is to companies for which we were unable to ascertain their finan (general commerce). As a result, Access Bank's portfolio is pre cial condition. Positively, credit concentration risk is partly offset dominantly short-dated, with credits maturing within 6 months by the fact that the bulk of loans (97%) were secured by real estate accounting for 68% of the total. The short tenured nature of these and other marketable assets as at 31 December 2011. credits is in line with trends in the industry. Director-related credits amounted to N90 billion, constituting 14% Figure 1: Distribution of loan book by sector of Access Bank's credit portfolio. As at year-end, all insider credits were classified as performing. Capital market Transportation Others 5% Construction 3% 7% 3% In the year under review, Access Bank's non-performing loans (NPL) increased by 57% to N59 billion, accounting for 9.4% of total General (2010: 7.7%). commerce loans This NPL ratio is higher than selected peers Oil& gas 14% (see figure 3), as well as the CBN's 5% recommended threshold. 17% Due to new credit classifications, Access Bank charged-off N9.2 Public sector billion from income for credit losses, resulting in a charge-off ratio 4% of 8% for the year (2010: 7%).

PageS _ _ . . The copyright of this document is reserved' by Agusto & Co. Limited. No matter contained herein may be reproduced, duplicated or copied by any means whatsoever without the prior written consent of Agusto & Co. Limited. Action will be taken against companies or individuals who ignore this warning. The information contained in this doCument has been obtained from published financial statements and other sources which we consider,to be reliable but ·do not gUarantee as such. The opinions expressed in tltis document do not represent investment or other advice and should therefore not •be constrUed as such. · Agusto &Co. RESEARCH,CRI!_DIT R ATINGS,,CRE!Jll; RISK MANAGEMENT.

ASSET QUALITY (CONT:D) Risk Management Figure 3: Non-performing loans to Total loans Access operates a centralized risk management and compliance division. Access Bank's Board Risk Management Committee and 20% Board Credit Committee are responsible for providing risk man agement oversight at the board level and ensuring compliance 16% with risk policies. Access Bank also has an Enterprise Risk Man 12% • Access agement (ERM) Group that sets policies, defines risk limits and II GTBank provides a framework for managing risk. The division oversees 8% B Zenith internal control, as well as credit, operational, market, and busi 4% ness risks. Access Bank's ERM Group is headed by a Chief Risk Officer who reports to the Group Managing Director and Board 0% 2011 2010 2009 Risk Committee.

Access Bank's Enterprise Risk Management (ERM) framework Management has disclosed that the growth in NPLs during 2011 adheres to tenets of the Basel II guidelines. The framework spans was partly on account of impaired loans inherited upon consolida credit, market, liquidity and operational risks. In line with ERM, tion with Intercontinental Banlc Access Bank acquired NPLs of N81 Access conducts enterprise-wide stress tests based on a variety billion from Intercontinental Bank and had newly classified credits economic scenarios to better understand the probable impact of of N18 billion. As part of a pro-active approach and in order to these factors on Access Bank's risk profile. sanitize the loan book, N77 billion was written off in 2011 resulting in year end NPLs of N59 billion. In 2011, the Credit Risk Management (CRM) Unit was reorgan ized and risk reporting was upgraded to meet the needs of di In the year under review, Access Bank's exposures to the general verse stakeholders. In addition, CRM was restructured along commerce sector accounted for the highest incidence of loan delin business and product lines to ensure that adequate attention is quency at 18%. Given the magnitude of exposure to this sector as given to each lending segment/product. Credit Risk Manage well as susceptibility to the weak economic climate, we believe ment now comprises 6 units: Commercial Credit Risk, Institu proper monitoring of these facilities is key to ensuring that asset tional Credit Risk, Retail & small loans Management, Remedial quality remains good. The financial services sector accounted for Assets Management, Credit Administration and Portfolio Man 12% of NPLs as at same date, while the capital market accounted agement. for 9%. We recognize that Access Bank has successfully executed strate Access Bank has taken a relatively bold approach to loss recogni gic acquisitions in the past. However, the full integration of In tion as shown by aggressive provisioning for loans inherited from tercontinental Bank will be more challenging, in our opinion, Intercontinental Bank. As at year-end, cumulative loan provisions given the size of this institution. While we consider risk manage amounted to N53 billion, providing adequate coverage of 89% for ment to be adequate, we believe Access Bank's ability to totally impaired loans. A review of delinquent credits reveals 39% are in surmount integration challenges is dependent on effective moni the lost category, and have been fully provided for. However, sixty toring of loans & advances given the enlarged loan book and -one percent (61%) are classified as substandard or doubtful, sug branch network. gesting that these could deteriorate further.

Access Bank has begun the process of restructuring and recovering outstanding facilities; a significant N5.1 billion was recovered dur ing the first quarter ended 31 March 2012. As at this date, Access Bank's unaudited financial statement showed modest improve ment in the NPL ratio to 8%.

In our opinion, Access Bank's asset quality is satisfactory, though there is need for further improvement. Management has disclosed that Access Bank will emphasize loan recovery in the short term, while credit growth will be focused on high quality obligors in priority sectors such as oil & gas, telecoms and manufacturing. While we regard these sectors as viable, we believe Access Bank's sector lending limits should be adhered to in order to minimise concentration risk.

Page 6 . . . The copyright of this document is reserved· by Agusto & Co. Limited. No matter contained herein may be reproduced, duplicated or copied by any means whatsoever without the prior written consent of Agusto & Co. Limited. Action will be taken against companies or individuals who ignore this warning. The information contained in this doCument has been obtained from published financial statements and other sources which we consider,to be reliable but "'do not gUarantee as such. ~he opinions expressed in th'is document do not represent investment or other advice and shou-ld therefore not 1be constrUed as such. · : Agusto &Co. RESEARCH,CREDITR ATINGS,,CREI}IJ;RISK MANAGEMENT_

EARNINGS

Access Bank's revenues are largely derived from intermediation, During the year under review, operating expenses grew by 53% with interest income accounting for 70% of the gross earnings of to N74 billion. This increase largely resulted from additional op- . N139 billion during the year ended 31 December 201L Foreign ex erating expenses incurred upon acquisition of Intercontinental change trading contributed 6% of gross earnings, while fees & Bank during the last quarter of the year. As a proportion of net other income accounted for 19%. By business lines, the bulk of earnings, operating expenses spiked to 79%, from 75% in 2010. earnings in 2011 was from commercial banking, which accounted for 50% of earnings. Subsequent to year-end, Access Bank embarked on various re structuring measures, including branch and staff rationalisation, Net earnings for Access Bank grew by a strong 46% to N95 billion in order to enhance operating efficiency. A total of 2,045 staff left during the year ended 31 December 201L This was largely driven Access in Q1 2012, while 140 duplicated/redundant branches by fund-based activities, which accounted for 56%. The increase in were closed as part of Access Bank's acquisition plan. We expect . net earnings was on account of the growth in loans, as well as inter expenses for Access Bank to be high in 2012, on the back of sev est income accrued from Access Bank's expanded portfolio of in erance packages paid to outgoing staff in Q1, as well as other vestment securities. As at the balance sheet date, Access Bank's restructuring costs. Nevertheless, we believe there will be long pool of government securities and AMCON bonds totalled N565 term efficiency gains for Access Bank as operations stabilise. billion, of which over N400 billion was assumed upon consolidation with Intercontinental Bank. As a result, interest earned on securi Pre-tax profits amounted to N20 billion as at year-end, an im ties trading increased by 224% to N24 billion, contributing 24% provement on N16 billion achieved in 2010. Commercial Banking (2010: 11%) of interest income for the year. operations contributed the bulk at 78%, while the Financial Mar kets and Retail Banking segments contributed 26% and 6% re- . Figure 4: Breakdown of Net earnings spectively. The Institutional Banking segment posted a pre-tax loss of N2 billion. Fees& other On a time-weighted basis, Access Bank's pre-tax return on aver age assets & contingents stood at L7% in 2011 (2010: LS%). Con versely, the pre-tax return on average equity improved to 10.9% (2010: 9.4%), supported by growth in earnings. Access Bank's profitability indicators for the year were lower than peers. In our opinion, Access Bank's profitability is moderate.

exchange 56% 8% Figure 5: Annualised Pre-tax Return on Average Equity

Access Bank's net interest margin declined to 62% (2010: 67%) fol lowing a 71% increase in interest charges in 2011. A preponderance Em Access

of costly interbank and tenored deposits in the funding mix ac GI GTBank

counts for most of the growth in interest expense. Following acqui U Zenith sition, Access Bank sought additional funding from the interbank market in order to pay down expensive deposits from financial institutions and the public sector previously held by Intercontinen tal Bank. Management has disclosed the focus going forward will be on reducing funding costs by lowering dependence on inter bank funds, and increasing Access Bank's share of low-cost depos its. In our opinion, Access Bank's enlarged client base and distribu Access Bank's annualised pre-tax average ROE for the quarter tion network put it in a good stead to achieve this goal. ended 31 March 2012 stood at 30%, an improvement over the position as at year-end 2011. Management has disclosed that . Access Bank's thinner margins were compensated for by a strong Access expects to achieve a full year ROE of 20% in 2012. We 63% growth in ancillary income. During the year, Access benefitted · consider this a realistic goal for Access given Access Bank's ex from the good performance of foreign exchange trading activities, panded low-cost funding base. In addition, Access Bank's im as well as increase in transactional income given an enlarged client proved funding structure provides the ability to take on larger base. Foreign exchange income grew by 127% in 2011, while com ticket transactions at lower cost. We expect that Access Bank will mission on turnover grew by 63% to N4 billion. To complement leverage these strengths to enhance profitability. interest income, management indicated that Access Bank will em phasize trade finance activities and also leverage its enhanced foot print to grow transactional service revenues.

Page 7 • _ .. . The copyright of this document is reserved' by Agusto & Co. Limited. No matter contained herein may be reproduced, duplicated or copied by any means whatsoever without the prior written consent of Agusto & Co. Limited. Action will be taken against companies or individuals who ignore this Warning. The information contained in this doCument has been obtained from published financial statements and other sources which we consider.to be reliable but -'do not gu'arantee as such. ~he opinions expressed in tHis document do not represent investment or other advice and sh~u·ld therefore not•be constrUed as such. · ! Agusto &Co. RESEARCH,CR~DITR ATINGS,,CREpn;RISK MANAGEMENT_

CAPITAL ADEQUACY LIQUIDITY AND LIABILITY GENERATION

Access Bank's ownership comprises both individual and institu During the year ended 31 December 2011, Access Bank's local tional investors, with paid-up share capital of N11.44 billion. As currency (LCY) deposits grew by 114% to N871 billion, funding at 31 December 2011, tier I capital stood at N197 billion, funding 43% of total assets & contingents. Growth in deposits during the 10% of total assets & contingents. Minority shareholders' interest year was driven by consolidation with Intercontinental Bank Plc, amounted to N23 billion (or 12% of tier I capital) as at the balance as well as aggressive deposit mobilisation. During the year, low sheet date, following significant growth in line with the acquisi cost demand and savings deposits grew by 198% to N573 billion, tion of Intercontinental Banl<. Access Bank's tier I capital ac while costly tenored funds increased by 38% to make up a lower counted for 84% of adjusted capital, higher than the regulatory 34% of LCY deposits (2010: 53%). The gains in the acquisition of minimum of 50%. Intercontinental Bank are reflected in the deposit mix, as well as in funding costs. Weighted average cost of funds (WACF) stood Access assumed an additional N699 billion in assets from the pur at 3.4% as at 31 December 2011. Subsequent to the financial year chase of Intercontinental Bank during the year under review. As end, the WACF nudged downwards to 3.3% as at 31 Marcl1 2012, a result, Access Bank's Basle ratio (adjusted capital to risk which has impacted positively on margins. weighted assets ratio) declined to 22%, from 30% the prior year. Nonetheless, we believe capital remains adequate relative to Figure 7: Structure of LCY deposits (2011 vs. 2010) business risks. In particular, capital adequacy as at year-end was supported by tier II capital of N40 billion, which largely com prised intermediation loans from the Nigerian Bank of Industry. Access Bank's capitalisation is compliant with regulatory re quirements, while the Basle ratio is in excess of the regulatory Iii 2011 minimum of 15% for an international bank. Iii 2010

Figure 6: Basle ratio

Demand Savings Time

Ill Access A review of Access Bank's funding by source reveals that LCY III GTBank deposits are predominantly from corporate clients, who account Ill Zenith for 70%. However, deposits are well diversified, with the twenty largest depositors accounting for a moderate 32% of LCY funds (excluding interbank takings). Although 82% of these top 20 de posits are volatile public sector accounts, we derive comfort from 2011 2010 2009 the fact that they constitute a moderate portion of the overall portfolio of deposits.

As at 31 December 2011, Access Bank had a large pool of govern ment securities, most of which were AMCON bonds received in exchange for impaired credits. During the year, Access ex changed classified loans worth N165 billion for AMCON bonds totalling N100 billion, while Intercontinental Bank received bonds worth N560 billion to clear up accumulated loan losses. Prior to year-end, an estimated N330 billion of the bonds were discounted with the CBN and used to settle Intercontinental Bank's debts. As at the balance sheet date, Access Bank's exposure to AMCON bonds stood at N305 billion. Agusto & Co. believes that Access Bank is somewhat exposed to market risk arising from this sub stantial holding of AMCON bonds. As inflation rises in the econ omy, the purchasing power of the bonds' future cash flows will decline. Furthermore, in a stressed period, Access could have difficulty disposing the AMCON bonds at the right price. Never theless, we believe Access Bank's enlarged pool of low-cost de posits should effectively support margins under such circum stances.

Page 8 • _ • .. . The copyright of this document is reserved•by Agusto & Co. Limited. No matter contained herein may be reproduced, duplicated or copied by any means whatsoever without the prior written consent of Agusto & Co. Limited. Action will be taken against companies or individuals who ignore this Warning. The information contained in this doCument has been obtained from published financial statements and other sources which we consider,to be reliable but ~do not gu'arantee as such. ~he opinions expressed in tliis document do not represent investment or other advice and should therefore not•be constrUed as such. : · Agusto &Co. RESEARCH.CREDITR AT1NGS. CREDTJ.;RISK MANAGEMENT LIQUIDITY AND LIABILITY GENERATION (Cont'd) OWNERSHIP, MANAGEMENT AND STAFF We view positively Access Bank's ability to secure funding from Access was listed on the NSE in 1998. Access Bank has 13.3 bil foreign institutions, which indicates some level of market confi lion ordinary shares in issue, held by over 450,000 investors. As dence. Access has short-term foreign lines totalling N61 billion at year-end 2011, no entity directly controlled up to 5% of Ac with 24 correspondent banks, which are used to meet clients' cess Bank's shareholding. trade finance needs. Foreign exchange risk is minimal given that a significant depreciation of the Naira is unlikely within the short Access Bank is governed by a 14-member board, which controls tenor of these transactions, and also in view of the CBN's deliber a 10.9% stake. Six members of the board are executive directors, ate efforts to maintain exchange rate stability. Access Bank also while eight others are non-executive directors. In line with the has long-term foreign borrowings totalling N8 billion availed by CBN's code of corporate governance, two non-executive direc foreign banks and multilateral institutions. To mitigate exchange tors are independent. The board executes oversight functions rate risk, foreign currency loans are granted strictly to clients with through four committees constituted in compliance with the dollar denominated revenues or to clients who purchase hedging corporate governance code. products from Access Bank. Access Bank's management team assumed the helm of affairs a decade ago and has grown the balance sheet (organically and Access exceeded the minimum liquidity ratio requirement of 30% inorganically) to N2 trillion, from N28 billion in 2002. Mr. Aig as at year-ended 31 December 2011, with a liquidity ratio of 74%. boje Aig-Imoukhuede is the Group Managing Director, while In addition, Access Bank's 53% ratio of loans to deposit (after Mr. Herbert Wigwe is the deputy Group Managing Director. backing out loans funded by free capital) was well within our They are supported by a senior management team comprising 5 expectation. Trade checks indicate that Access has a good reputa Executive Directors and 15 General Managers. tion in the Nigerian interbank market. Agusto & Co. considers Access Bank's liquidity to be good, and funding is stable. Upon consolidation with Intercontinental Bank, staff strength increased threefold to 5,978 persons (2010: 1,754 persons). Fol Figure 8: Net loans as a percentage of deposit liabilities lowing the rationalization exercise in Q1 2012, core staff re duced to 3,114 persons as at 31 March 2012. Management staff account for 30% of staff. Access also has 7,348 non-core staff performing support roles within Access Bank.

Staff productivity, as measured by net earnings per staff, de • Access clined by 57% to N16 million in 2011 and was lower than peers IIII GTBank II Zenith (see table below). Staff cost per employee also declined by 58%, following growth in staff numbers. Agusto & Co. expects staff cost to rise in financial year 2012 due to severance (estimated to exceed N6 billion) paid to disengaged employees. Nevertheless, 2011 2010 2009 staff productivity should improve as the merged entity stabi lises.

Table 2: Staff productivity indicators

Access GTBank Zenith (H'OOO) (N'OOO) (H'OOO) Cost/staff 3,749 5,881 5,550 Net loans/staff 97,541 200,837 100,221 LCY deposits/staff 167,675 240,317 163,671 Net earnings/staff 15,807 38,836 20,978

Access Bank's management indicated that most of the expected integration challenges relating to Human Resources have been surmounted. Following rationalization, salaries of former Inter continental Bank staff were harmonized with Access Bank's standards, while a "change team" was established to manage employee expectations. Access has begun training staff and conducting team-building seminars to improve the people culture and ensure employees have the necessary skills for good performance. While these have short-term cost implica tions, we believe there will be future efficiency gains.

In our opinion, Access Bank's management team is stable and proactive. Page 9 . , . . . The copyright of this document is reserved' by Agusto & Co. Limited. No matter contained herein may be reproduced, duplicated or copied by any means whatsoever without the prior written consent of Agusto & Co. Limited. Action will be taken against companies or individuals who ignore this Warn ing. The information contained in this doCument has been obtained from published financial statements and other sources which we consider,to be reliable but"dO not gu~arantee as such. ~he opinions expressed in tHis document do not represent investment or other advice and should therefore not •be constrited as such. · : Agusto &Co. RESEARCH,CREpiT R ATINGS,,CREJ?IJ;RISK MANAGEMENT_

MARKET SHARE OUTLOOK

Access Bank has recorded steady growth in market share since Access Bank's consolidation with Intercontinental has resulted in the current management team assumed the helm of affairs in larger international commercial bank. Access Bank's increased 2002. This growth has been driven by increased business vol branch network and customer base afford access to a larger pool umes and supported by consolidation with other banks. of low-cost funds to support business expansion. Access Bank's immediate focus is to leverage these strengths to increase busi The acquisition of Intercontinental Bank in 2011 made Access ness volumes especially in the corporate segment. Growth is Bank one of Nigeria's largest banking groups with tier I capital expected to come from high credit quality obligors in priority of N197 billion as at 31 December 2011 and net earnings of N94 industries and segments such as the upstream oil & gas and billion as at the same date. The merger provides impetus for Ac manufacturing segments. cess Bank to further grow market share given an expanded re source base. Following consolidation with Intercontinental Bank, Access faces a number of challenges in the fast-growing banking total assets and deposits more than doubled in 2011, while industry. Firstly, thinning margins in the over-banked corporate branches increased to 384 from 130 the prior year. Having over banking space (where Access Bank's operations are prominent) come several integration challenges, we expect that the current necessitates that Access Bank seeks creative ways to differentiate financial year will see Access Bank begin to harness the benefits itself in order to retain corporate clients. Positively, Access of this acquisition. While we note that Access Bank faces in Bank's enhanced retail footprint should stave off competition creased competition from other top tier banks (particularly in the from other banks in the retail segment. Nevertheless, we are of corporate segment), we believe ongoing reforms in the financial the opinion, that there is a need to further improve brand per services sector put Access Bank in a good position to accomplish ception in order to remain competitive in the retail segment. further growth. Agusto & Co. expects Access Bank's liquidity to remain good, management to remain stable & proactive and capitalization ratios to remain compliant with regulatory requirements. We believe the current year will see Access Bank better harness the benefits of consolidation with Intercontinental Bank. However, improving cost efficiency and keeping a tight rein on asset qual ity will be integral to achieving Access Bank's strategic growth objectives.

We hereby attach a "stable" outlook to this rating.

Page 10 . . . The copyright of this document is reserved' by Agusto & Co. Limited. No matter contained herein may be reproduced, duplicated or copied by any means whatsoever without the prior written consent of Agusto & Co. Limited. Action will be taken against companies or individuals who ignore this Warning. The information contained in this doCument has been obtained from published fin3ncial statements and other sources which we consider,to be reliable but ·do not gu~arantee as such. ~he opinions expressed in tliis document do not represent investment or other advice and should therefore not'be constrUed as such. · : Agusto &Co. RESEARCnCREDIT RATINGS, CREDURISK MANAGEMENT_

!ACCESS BANK PLC BAI,ANCE SHEET AS AI 31-Dec-11 31-Dec-10 31-Dec-09 N'OOO N'OOO N 'OOO

Cash & equivalents 62,803,160 3.1% 21,829,262 2.1% 61,596,910 7.6% 2 Government securities 260,902,251 12.7% 143,321,448 13.8% 80,010,660 9.9% 3 AMCON bonds 305,642,854 14.9% 2,690,920 0.3% 4 Quoted investments 28,992,787 L4% 5,030,870 0 .5% 1,713,013 0.2% 5 Placements with discount houses 6 LIQUID ASSETS 658,341,052 32.1% 172,872,500 143,320,583

7 BALANCES WITH NIGERIAN BANKS 13,384,375 0.7% 833,975 0.1% 10,324,115 1.3% 8 BALANCES WITH BANKS OUTSIDE NIGERIA 114,923,071 5 .6% 102,348,149 9 .8% 82,852,992 10.2%

9 Direct loans and advances - GToss 632,791,564 30.9% 487,976,104 46.8% 416,584,920 51.4% 10 Less: Cumulative loan loss provision (52,506,985) -2.6% (35,508,007) -3.4% (29,674,789) -3.7% 11 Direct loans & advances - net 580,284,579 28.3% 452,468,097 43.4% 386,910,131 47.7% 12 Advances under finance leases - net 2,817,895 0.1% 3,084,393 0.3% 4,249,973 0.5% l3 TOTAL LOAi"'S & LEASES- NET 583,102,474 28.5% 455,552,490 43.7% 391,160,104 48.3%

14 INTERESTRECEIVABLE 4,683,719 0.2% 2,000,676 0.2% 2,120,979 0.3% 15 OTHERASSETS 54,232,748 2.6% 16,860,789 1.6% 16,911,226 2 .1% 16 DEFERREDLOSSES 17 RESTRICTED FUNDS 76,398,814 3 .7% 3,566,031 0.3% 2,995,790 0.4% 18 UNCONSOLIDATED SUBSIDIARIES & ASSOCIATES 2,812,805 0.1% 300,155 0.0% 19 OTHERLONG-TERMINVESTMENTS 55,990,708 2.7% 22,397,330 2.1% 11,945,681 1.5% 20 FIXED ASSETS & INTANGIBLES 70,876,988 3.5% 28,382,832 2.7% 31,852,313 3.9%

21 TOTAL A SSETS 1,634,746,754 79.8% 804,814,772 693,783,938

22 TOTAL CONTINGENT ASSETS 414,124,013 20.2% 237,375,819 22.8% 116,546,516 14.4%

23 TOTAL ASSETS & CONTINGENTS 2,048,870,767 100% 1,042,190,591 810,330,454

CAPITAL & LIABILITIES

24 TIER I CAPITAL (CORE CAPITAL) 196,974,963 9.6% 175,318,730 16.8% 167,807,139 20.7% 25 TIER2 CAPITAL 40,158,095 2 .0% 23,218,427 2.2% 3,209,083 0.4%

26 LONG-TERM FOREIGN BORROWINGS 68,585,888 3.3% 32,282,597 3.1% 34,663,647 4.3%

27 Demand deposits 428,099,738 20.9% 177,056,117 17.0% 133,379,004 16.5% 28 Savings deposits 145,372,061 7 .1% 15,308,599 1.5% 12,481,014 1.5% 29 Time deposits 297,223,908 14.5% 215,088,831 20.6% 200,257,364 24.7% 30 Inter-bank takings 24,908,908 1.2% 20,793,054 2.0% 11,619,261 1.4% 31 TOTAL DEPOSIT LIABILITIES - LCY 895,604,615 43.7% 428,246,601 4Llo/o 357,736,643 44.1% 32 Customers' foreign currency balances 270,492,468 13.2% 115,555,885 11.1% 98,517,730 12.2% 33 TOTAL DEPOSIT LIABILITIES 1,166,097,083 56.9% 543,802,486 52.2% 456,254,373 56.3%

34 INTERESTPAYABLE 3,079,514 0.2% 1,139,969 0.1% 1,113,038 0.1% 35 OTHERLIABILITIES 159,851,211 7.8% 29,052,563 2.8% 30,736,658 3.8%

36 TOTAL CAPITAL & LIABlLITIES 1,634,746,754 79.8% 804,814,772 693,783,938

37 TOTAL CONTINGENT LIABILITIES 414,124,013 20.2% 237,375,819 22.8% 116,546,516 14.4%

38 TOTAL CAPITAL, LIABILITIES & CONTINGENTS 2,048,870,767 100% 1,042,190,591 810,330,454 Proof

BREAKDOWN OF CONTINGENTS 39 Acceptances & direct credit substitutes 234,209,908 11.4% 102,128,235 9.8% 48,312,144 6.0% 40 Guarantees, bonds etc.. 179,914,105 8.8% 135,247,584 13.0% 68,234,372 8.4% 41 Short-term self liquidating contingencies

Page II • • ., . The copyright of this document is reserved' by Agusto & Co. Limited. No matter contained herein may be reproduced, duplicated or cOpied by any means whatsoever without the prior written consent of Agusto & Co. Limited. Action will be taken against companies or individuals who ignore this Warning. The information contained in this doCument has been obtained from published fimi.ncial statements and other sources which we consider.to be reliable but·do not gUarantee as such. ~he opinions expressed in tHis document do not represent investment or other advice and shou·ld therefore not•be constrUed as such. Agusto & Co. RESEARCH,CREDITR ATINGS, CREDIJ;RISK MANAGEMENT_

ACCESSBANK~=P=L~C______

INCOME STATEMENT FOR THE YEAR ENDED 31-Dec-11 31-Dec-10 31-Dec-09 N'OOO N'OOO N'OOO

4 2 Interest income 97,617,048 70.3% 65,787,157 72.2% 66,467,167 78.2% 43 Interest expense (37,039,355) -26.7% (21,620,722) -23.7% (30,241,144) -35.6% 44 Loan loss expense (7,407,527) -5.3% ( 4, 708, 157) -5.2% (21,531,481) -25.3% 45 NET REVENUE FROM FUNDS 53,170,166 38.3% 39,458,278 43.3% 14,694,542 17.3% 46 ALL OTiffiR INCOME 41,322,366 29.7% 25,354,907 27.8% 18,513,388 21.8%

47 NET EARNINGS 94,492,532 68.0% 64,813,185 71.1 o/o 33,207,930 39.1 o/o

48 Staff costs (22,412,231) -16.1% (16,147,662) -17.7% (10,669,829) -12.6% 49 Depreciation expense (5,981,078) -4.3% (5,448,067) -6.0% (3,916,803) -4.6% 50 Other operating expenses (45,797,858) -33.0% (27,048,586) -29.7% (22,102,863) -26.0% 51 TOTAL OPERATING EXPENSES (74,191,167) -53.4% ( 48,644,3l:S) -53.4% (36,689,495) -43.2%

52 PROFIT (LOSS) BEFORE TAXATION 20,301,365 14.6% 16,168,870 17.7% (3,481,565) -4.1% 53 TAX (EXPENSE) BENEFIT (3,593, 110) -2.6% (5,100,749) -5.6% (920,601) -1.1%

54 PROFIT (LOSS) AFTER TAXATION 16,708,255 ~ 11,068,121 12.1% (4,402,166) ~

55 NON-OPERATING INCOME (EXPENSE) - NET (879,093) -0.6% 176,442 0.2% 207,584 0.2% 56 DIVIDEND (8,944, 117) -6.4% (3,577,650) -3.9% (11,349,982) -13.4%

57 GROSS EARNINGS 138,939,414 1 li!J!.:l:9. 91,142,0641 100% 84,980,5551 ll!llli.

58 AUDITORS KPMG KPMG KPMG 59 OPINION CLEA.l\f CLEAl"\f CLEAN

31-Dec-11 31-Dec-10 31-Dec-09

EARNINGS 60 Net interest margin 62.1% 67.1% 54.5% 61 Loan loss expense/Interest income 7.6% 7.2% 32.4% 62 Return on average assets (Pre - tax) 1.3% 1.7% -0.6% 63 Return on average equity (Pre - tax) 10.9% 9.4% -2.6% 64 Operating Expenses/Net earnings 78.5% 75.1% 110.5% 65 Gross earnings/rota! assets & contingents 9.0% 9.8% 10.4%

EARNINGS MIX 66 Net revenue from funds 56.3% 60.9% 44.3% 67 All other income 43.7% 39.1% 55.7%

LIQUIDITY 68 Total loans & leases- net!rotal Icy deposits 53.1% 71.9% 73.9% 69 Liqnid assets/Total Icy deposits 74.3% 37.5% 41.0% 70 Demand deposits/Total Icy deposits 47.8% 41.3% 37.3% 71 Savings deposits!rotallcy deposits 16.2% 3.6% 3.5% 72 Time deposits!rotal Icy deposits 33.2% 50.2% 56.0% 73 Inter-bank borrowings!rotal Icy deposits 2.8% 4.9% 3.2% 7 4 Interest expense - banks/Interest expense 26.0% 13.1% 4.9%

75 NET FOREIGN CURRENCY ASSETS (LIABILITIES) (155,569,397) (13,207,736) (15,664,738)

Pagel2 _ _ . The copyright of this document is reserved' by Agusto & Co. Limited. No matter contained herein may be reproduced, duplicated or copied by any means whatsoever without the prior written consent of Agusto & Co. Limited. Action will be taken against companies or individuals who ignore this Warning. The information contained in this doCument has been obtained from published finlincial statements and other sources which we consider,to be reliable but·do not gu'arantee as such. ~he opinions expressed in th'is document do not represe'nt investment or other advice and shou·Id therefore not•be constrUed as such. Agusto &Co. RESEARCH,CRl'_DIT RATINGS,,CREplJ;RlSK MANAGEMENT_

ACCESS BANK PLC

KEY RATIOS CONT'D 31-Dec-11 31-Dec-10 31-Dec-09

ASSET QUALTIY 76 Performing loans (N'OOO) 573,606,941 450,302,965 335,913,484 77 Non-performing loans (N'OOO) 59,184,623 37,673,139 80,671,439 78 Non-performing loanslrotalloans- Gross 935% 7.72% 1936% 79 Loan loss provision/Totalloans - Gross 83% 7.3% 7.1% 80 Loan loss provision/Non-performing loans 88.7% 94.3% 36.8% 81 Risk-weighted assetsffotal assets & contingents 503% 62.8% 65.4%

CAPITAL ADEQUACY 82 Adjusted capital/risk weighted assets 22.4% 30.1% 31.9% 83 Tier I capital/Adjusted capital 84% 88% 98% 84 Adjusted capital/Total loans - net 40% 43% 43% 85 Capital unimpaired by losses (N'OOO) 196,974,963 175,318,730 167,807,139

CAPITAL ADEQUACY SIRESS TEST 86 Adjusted capital (N'OOO) 231,042,645 197,105,446 168,977,919 87 Cumulative loan loss provision (actual reserves) 52,506,985 35,508,007 29,674,789 88 Equity before all provision (line 86 + line 87) 283,549,630 232,613,453 198,652,708 89 Required reserves* 107,918,186 68,483,474 102,187,769 90 Equity after required reserves (line 88 - line 89) 175,631,444 164,129,979 96,464,939 91 Equity after required reserves/risk weighted assets 17.0% 25.1% 18.2%

STAFF INFORMATION 92 Net earnings per staff (N'OOO) 15,807 36,952 27,181 93 Staff cost per employee (N'OOO) 3,749 9,206 8,733 94 Staff costs/Operating expenses 30.2% 33.2% 29.1% 95 Average number of employees 5,978 1,754 1,629 96 Average staff per office 16 13 12

OTHER KEY INFORMATION 97 Legal lending limit(N'OOO) 39,394,993 35,063,746 33,561,428 98 Other unamortised losses(N'OOO) NONE NONE NONE 99 Unreconciled inter-branch items (N'OOO) DR/(CR) NONE NONE NONE 100 Number of offices 384 131 131 101 Age (in years) 23 22 21 102 Governroent stake in equity (Indirect)

MARKET SHARE OF INDUSTRY TOTAL Estim a tes Actual Actual 2011 2010 2009 103 Ley deposits (excluding interbank takings) 7.9% 4.5% 4.2% 104 Total assets & contingents 9.1% 5.8% 5.1 o/o 105 Total loans & leases - net 8.6% 7.6% 6 .7o/o 106 Non interest income 7.4% 53% 4.2% 107 Net interest income 6.9% 6.2% 4.8%

This is calculated as 100% of non-performing loans, 5% of performing loans (including direct credit substitutes disclosed as contingent assets) and 1% for all other assets excluding cash, federal governroent obligations, placements with discount houses and balances at CBN.

Page 13 . . . The copyright of this document is reserved' by Agusto & Co. Limited. No matter contained herein may be reproduced, duplicated or copied by any means whatsoever without the prior written consent of Agusto & Co. Limited. Action will be taken against companies or individuals who ignore this Warning. The information contained in this doCument has been obtained from published financial statements and other sources which we consider.to be reliable but·do not gu'arantee as such. The opinions expressed in th'is document do not represent investment or other advice and sh~u· ld therefore not•be constrUed as such. · · Agusto & Co Limited

RATING DEFINITION

Aaa A financial institution of impeccable financial condition and overwhelming capacity to meet obligations as and when they fall due, Adverse changes in the enyironment (macro-econorni!=, political and regulatory) are unlikely to lead to deterioratioi;l in financial condition or ci,n impairme~t of the ability, to meet its obligations as and when they fall due. I~ our.opinion, regulatory apd/or shareholder support rvill be obtained, if requireg. Typically, a financial instjtution in this category will. score more than 89% on. our scoring grid.

Aa A finandal institution 'of very good.finandal condition and strong capacity t~ meet its obl.igations as and when they fall due. Adverse changes in the environment (macro-economic, political and regulatory) will result in a slight increase the risk attributable to an exposure to this financial institution. How.ever, financial condition and ability to meet obligations as and when they fall due should remain strong. Although regulatory support is·not assured, shareholder support will be obtained, if required. Typically, a financial institution in this category will score 80% to 89% on our scoring grid. ·. · ·

A A financial institution of good finahcial condition and strong capacity to meet its obligatil:>ns. Adverse changes in tl).e environment (ma~ro-eCOI).Omic, political and regulatqry) will result in a qtediUII\inCrease in the risk ?-ttributfl.ble to an exposure to this financial institution. However, financial condition and ability to meet obligations as and when they fall due should remain largely unchanged. In .our opinion, shareholder !>upport should be obtaineible, if required. Typically, a financial institution in this category will score 70% to 79% on our. scoring grid.

Bbb A financial institution of satisfactory· financial con'dition and adequate capacity to meet its obligations as and when they falJ due. It may have one major weakness .which, if addressed, should not impair its ability to meet obligations as and when due, Adverse changes in the'environment (macro-econoffiic, political and regulatory) will result in a medium increase in the risk attributable to an exposure to this financial institution. Typically, "a financial institution in this category will scm;e 60% to 69% on our scoring grid . .

Bb Financial condition is satisfactory and ability to meet obligations as and when they fall due exists. May have one or more major weaknesses. Adverse changes in the environment (macro-economic, political and regulatory) will increase risk significantly. Typically, a financial institution in this category will score 50% to 59% on our scoring_grid.

B Finantial condition is·weak but obligations ,are still being met as and ~hen • they · fall due. Has m

CCC Financial condition is very weak. Net worth is likely to be negative and obligations may. already be in default. A financial institution in this category will score less than 40% on our scoring grid.

D In default:

A "+" (plus) or "-" (minus) sign may be ·~s~igned to ratings fro~ A~ to C to reflect compa~ativ~ position within the rating category. !herefore, a rating with+ (:plus) attached'to it is a notcJt higher than' a rating wit~out the+ (plus) sign and two notches higher than a rating with the - (ininus) sign.