2019 ANNUAL REPORT & ACCOUNTS ACCESS BANK PLC 1 access more 2019 ANNUAL REPORT & ACCOUNTS 2 ACCESS BANK PLC MERGING CAPABILITIES FOR SUSTAINABLE GROWTH 2019 ANNUAL REPORT & ACCOUNTS ACCESS BANK PLC 3 1 OVERVIEWS .............08 10 • Business and Financial Highlights 12 • Locations and Offices 14 • Chairman’s Statement CONTENTS// 18 • Chief Executive Officer's Review 2 BUSINESS REVIEW.............22 24 • Corporate Philosophy 25 • Reports of the External Consultant 26 • Commercial Banking 30 • Business Banking 34 • Personal Banking 40 • Corporate and Investment Banking 44 • Transaction Services, Settlement Banking and IT 46 • Digital Banking 50 • Our People, Culture and Diversity 54 • Sustainability Report 74 • Risk Management Report 3 GOVERNANCE .............92 94 • The Board 106 • Directors, Officers & Professional Advisors 107 • Management Team 108 • Directors’ Report 116 • Corporate Governance Report 136 • Statement of Directors’ Responsibilities 138 • Report of the Statutory Audit Committee 140 • Customers’ Complaints & Feedback 144 • Whistleblowing Report 4 FINANCIAL STATEMENTS ............148 150 • Independent Auditor’s Report 156 • Consolidated Statement of Comprehensive Income 157 • Consolidated Statement of Financial Position 158 • Consolidated Statement of Changes in Equity 162 • Consolidated Statement of Cash Flows 164 • Notes to the Consolidated Financial Statements 203 • Other National Disclosures SHAREHOLDER 5 INFORMATION ............404 406 • Shareholder Engagement 408 • Notice of Annual General Meeting 412 • Explanatory Notes to the Proposed Resolutions 414 • Dividend Payment History 416 • Capital Formation 417 • e-Dividend Mandate Form 419 • Shareholder Information Update Form 421 • Proxy Form 423 • Investor Enquiries CORPORATE 6 INFORMATION ............426 428 • Branch Network and Onsite ATM Locations 429 • Offsite ATM Locations 430 • Correspondent Banks 431 • Agency Banking Network 2019 ANNUAL REPORT & ACCOUNTS 4 ACCESS BANK PLC WELCOME The year 2019 saw Access Bank complete a landmark business combination with the defunct Diamond Bank Plc in record time. The consummation of the deal has undoubtedly made the Bank the largest bank in Nigeria by total assets and customer base. The transaction was the combination of Diamond Bank’s capabilities in the retail and digital space and Access Bank's established domi- nance in the corporate banking, risk management and best practice corporate governance. This report is an acknowledgment of the Bank’s gradual phase of dominance in Africa’s banking landscape; the synergy we have found within the larger institu- tion, the barriers we have knocked down and the opportunities we have built up. But more than that, this is about the success that we have witnessed across all our business lines. We seek to create sustainable val- ue by developing the opportunities embedded in our operations which We are on a represent the most attractive op- tions. This is in addition to our ex- steady journey isting commitment to sustainable business practices and demon- to becoming stration of our ability to re-engineer the face of Africa by engaging in transactions, processes and part- Africa’s Gate- nerships that enable future gener- ations to meet their needs. way to the The future is bright. Access Bank is World. stronger than ever before and ready to push the limits. 2019 ANNUAL REPORT & ACCOUNTS ACCESS BANK PLC 5 2019 ANNUAL REPORT & ACCOUNTS 6 ACCESS BANK PLC 2019 ANNUAL REPORT & ACCOUNTS ACCESS BANK PLC 7 2019 ANNUAL REPORT & ACCOUNTS 8 ACCESS BANK PLC 01 OVERVIEW A brief review of Access Bank’s Financial and Operational Achievements in the past year 10 Business and Financial Highlights 12 Locations and Offices 14 Chairman’s Statement 18 Chief Executive’s Review 2019 ANNUAL REPORT & ACCOUNTS ACCESS BANK PLC 9 BUSINESS AND Gross Earnings FINANCIAL HIGHLIGHTS 667 529 459 2017 2018 2019 26.1% N’billion Profit Before Tax Profit After Tax 115 98 103 95 78 60 2017 2018 2019 2017 2018 2019 11.8% N’billion 2.7% N’billion 2019 ANNUAL REPORT & ACCOUNTS 10 ACCESS BANK PLC 1 OVERVIEWS 2 BUSINESS 3 GOVERNANCE 4 FINANCIAL 5 SHAREHOLDER 6 CORPORATE REVIEW STATEMENTS INFORMATION INFORMATION Customer Deposits Net Loans & Advances 4,256 3,064 2,565 2,136 2,245 2,064 2017 2018 2019 2017 2018 2019 65.9% N’billion 43.5% N’billion Shareholders’ Funds Total Assets 610 7,147 491 4,954 511 4,102 2017 2018 2019 2017 2018 2019 24.4% N’billion 44.3% N’billion In thousands of Naira 2019 2018 2017 Gross Earnings 666,753,600 528,744,579 459,075,779 Profit Before Tax 115,378,579 103,187,703 78,169,119 Profit After Tax 97,509,659 94,981,086 60,087,491 Customer Deposit 4,255,837,303 2,564,908,384 2,244,879,075 Net Loans And Advances 3,064,404,788 2,136,095,776 2,064,101,703 Shareholders Funds 610,192,896 490,511,755 511,195,037 Total Assets 7,146,610,142 4,954,156,938 4,102,242,823 2019 ANNUAL REPORT & ACCOUNTS ACCESS BANK PLC 11 LOCATIONS AND OFFICES GAMBIA SIERRA GHANA NIGERIA UNITED CONGO ZAMBIA RWANDA LEONE KINGDOM UNITED ARAB 2019 EMIRATES LEBANON INDIA CHINA ANNUAL REPORT & ACCOUNTS 12 ACCESS BANK PLC 1 OVERVIEWS 2 BUSINESS 3 GOVERNANCE 4 FINANCIAL 5 SHAREHOLDER 6 CORPORATE REVIEW STATEMENTS INFORMATION INFORMATION We are a leading financial institution headquartered in Nigeria, driven by strong core values through which we have continu- ously delivered solid and consistent performance. We are in business to help our growing customer base build a sustain- able future by offering bespoke products and solutions deliv- ered by a skilled workforce across Sub-Saharan Africa, United Kingdom, the Middle East and Asia. The Bank is licensed to provide international banking ser- chains. In deploying products and services, the Bank ad- vices and is renowned for its comprehensive range of fi- heres to responsible business practices and readily com- nancial product offerings. The key business segments of mits resources to social investments in fulfillment of its the Bank are: Corporate and Investment Banking, Com- corporate social responsibility objectives. mercial Banking, Business Banking and Personal Banking. The key customer segments include: Telecommunica- We are located in all major commercial centres and cities tions, Beverages, Manufacturing, Construction, Oil & Gas, across Nigeria. We operate 7 subsidiaries within West Afri- Parastatals, High Networth Individuals, Middle Income ca, East Africa and the United Kingdom. The Bank also has Professionals, and financial inclusion customers. representative offices in the Republic of China, Lebanon, United Arab Emirates and India. We are proud of our ability to add value to clients and to leverage our unique value proposition to provide innova- tive and proactive solutions across entire economic value United United Arab Democratic Emirates Republic of Kingdom Congo Rep. Office: 1 Number of Branches: 2 Number of Branches: 5 Ghana Lebanon Gambia Number of Branches: 52 Rep. Office: 1 Number of Branches: 6 China India Sierra Leone Rep. Office: 1 Rep. Office: 1 Number of Branches: 4 Nigeria Zambia Rwanda Number of Branches: 583 Number of Branches: 8 Number of Branches: 8 2019 ANNUAL REPORT & ACCOUNTS ACCESS BANK PLC 13 CHAIRMAN’S STATEMENT Access Bank is poised for sustainable growth on the back of its newly attained position in the Nigerian Banking Industry. We remain ex- tremely committed to optimizing value for all our stakeholders. MOSUN BELO-OLUSOGA, FCA This, we will achieve by focusing on CHAIRMAN delivering superior and sustainable financial performance whilst making the right investments essential to delight our stakeholders and enhance customer loyalty. 2019 ANNUAL REPORT & ACCOUNTS 14 ACCESS BANK PLC 1 OVERVIEWS 2 BUSINESS 3 GOVERNANCE 4 FINANCIAL 5 SHAREHOLDER 6 CORPORATE REVIEW STATEMENTS INFORMATION INFORMATION Overview Bank Plc and defunct Diamond Bank Plc, is now conclud- ed. The combination of Diamond Bank’s strong retail cus- Our Bank has made significant progress in accomplishing tomer franchise and leading digital platform with Access its strategic objectives despite the challenging economic Bank’s corporate banking capabilities, proven risk man- and regulatory landscape. Access Bank is poised for sus- agement and capital management expertise has created tainable growth on the back of its newly attained position a diversified financial institution with strong value creation in the Nigerian Banking industry. We remain extremely potential. committed to optimizing value for all our stakeholders. This, we will achieve by focusing on delivering superior and The combination has birthed the largest bank in Nigeria by sustainable financial performance whilst making the right customer base and total assets and the largest in Africa investments essential to delight all our stakeholders and by customer base. This is a testimony to the ability of the enhance customer loyalty. Bank to seamlessly execute its strategies. No doubt, a new vista is opened for the Bank by this strategic positioning as In 2019, global growth slowed down amidst growing ten- we continue to consolidate on this achievement and en- sions between the United States and China on trade and hance our retail contribution to our profitability. technology. Growing trade barriers and their associated uncertainties have led to drags on business sentiments and activities globally. Financial flows have remained large- Performance and Dividend ly subdued, on the back of the decline in foreign direct investment flows following the tax reform in the United The Group recorded a Profit Before Tax of N115.4 billion States. The lethargy in economic activities is even more for the year as we continue to realise the synergies aris- evident across emerging and developing markets despite ing from the merger. Credit impairment increased by 38% modest growth in the first half of 2019. In addition, capital owing to the need for us to write off some bad loans in or- flows to emerging market economies reflected the shift in der to maintain a healthy loan book. Similarly, we achieved investor sentiment with a resultant reduction in equities a single digit Non-Performing Loans Ratio of 5.8% within exposure.