Inspite of current macro economic issues , we have made solid progress in the first quarter of 2020 in line with our 2018-2022 five year strategy. This is based on a sustainable and resilient business model; as we continue to invest in our people, technology and product offerings to better serve our customers.
On the one year anniversary of the Bank’s merger with Diamond Bank, the Group delivered solid earnings underscoring the value potentials of the newly expanded business franchise with Gross Earnings of N209.8bn, a 31% increase from the prior year. A major driver of this growth is the 58% increase in non-interest income to N77.9bn, on the back of improved gains on trading instruments and a decisive approach to grow transaction income sustainably through channels and other E-business.
We have taken major strides in embedding efficiency in all facets of our business, leveraging retail and pursing proposed merger synergies. We have achieved N54.3bn of the proposed N153.9bn synergies, of which revenue synergies account for 86%. Showcasing further impact of the value accretive merger, our average Cost of Funds dropped 60bps y/y and q/q, leading to an improved Net Interest Margin of 5.9%
Despite the high cost of operation, arising from the enlarged business scale, and increase in net impairment charge, Profit before Tax (PBT) grew by 3% to N46.3bn. Our Cost-to-Income ratio stood at 62.2% due to increased cost of operations of the enlarged business scale, higher regulatory costs and increased investment in creating IT efficiency slacks poised to meet the Bank’s future growth ambitions.
Our capital and liquidity position remained above regulatory levels, with a Capital Adequacy Ratio of 20.9% and liquidity ratio of 44.6%, demonstrating the capacity of the enlarged balance sheet to cope with possible shocks. Immense focus was also placed on asset quality with a conservative stance, backed with write offs to further drive our NPL ratio down to 5.5% in the period.
Recognizing the impact of the COVID-19 Pandemic on macro, social, and consumer behavior, Access Bank remains committed to delivering innovative service offerings and strong value to our customers and stakeholders. In view of this, we have enacted a wide-ranging set of financial stability measures and taken proactive steps to minimise our exposures and migrate more of our customers to our E-banking platforms.
