Snapshot for week beginning 16 May. Access Bank, one of Nigeria’s largest banks, has embarked on a round of acquisitions in Africa as it seeks to overcome domestic hurdles.
The Nigerian market has been plagued by stagflation and dollar shortages that is shrinking the lending market and frustrating businesses of all size.
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In response, Access Bank, a multinational commercial bank owned by Access Bank Group, has been ramping up its ambitious growth strategy.
Over the past 26 years, the bank has evolved from an obscure Nigerian Bank into a world-class African financial institution. Today, it is one of the five largest banks in Nigeria in terms of assets, loans, deposits, and branch network.
In recent years, the bank has been on an impressive growth streak, both organically and by acquisition.
A determined growth strategy
Access Bank has agreed to buy a majority stake in African Banking Corporation of Botswana for cash, a month after acquiring a South African bank.
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By GlobalDataThe Nigerian bank will acquire just over 78% of BancABC Botswana for an undisclosed cash sum of around 1.13 times book value as well as a two-year deferred payment, Atlas Mara said in a statement on Monday.
The deal with ABC Holdings, the local unit of London-listed Atlas Mara, expands Access Bank’s African presence to 10 countries. It is expected to close before the end of the second quarter.
Access Bank shares fell 1.32% to 7.50 naira. They have fallen 36% from a peak of 11.77 naira in January last year, before it acquired Kenya’s Transnational Bank.
“We remain committed to a disciplined and thoughtful expansion strategy in Africa, which we believe will create strong, sustainable returns,” Access Group Chief Executive Herbert Wigwe said.
BancABC is Botswana’s fifth largest bank and has a quality retail loan book with the scope for expansion into corporate and small to medium-sized enterprise lending, Access said.
Nigerian lenders have been seeking new ways to boost profit amid slow economic growth at home, a drop in government bond yields and a rise in restructured loans due to the Covid-19 pandemic.
Access Bank bought a controlling stake in South Africa’s Grobank for around $60 million in March, becoming the first Nigerian lender to venture into South Africa. It has also struck recent deals in Zambia and Mozambique.
With more than $16 billion of assets and a focus on corporate and retail banking, Access is restructuring into a holding company to drive its international expansion.
Deal of the week: Access Bank Mozambique Acquires African Banking (Mozambique)
Access Bank has announced that its wholly owned banking subsidiary, Access Bank Mozambique, has completed the acquisition of African Banking Corporation, also known as BancABC Mozambique, a subsidiary of the London Stock Exchange-listed Atlas Mara Limited.
This was disclosed on Tuesday in a statement signed by the lender’s Company Secretary, Mr Sunday Ekwochi.
Commenting on the acquisition, the Group Managing Director/Chief Executive Officer, Access Bank, Mr Herbert Wigwe, said:
“We are pleased with the completion of this acquisition which significantly strengthens our banking franchise in Mozambique and represents a transformational step in our growth plans in the country and the broader South Africa region.
“We are building the scale necessary to compete effectively and efficiently in key African markets outside Nigeria and ensure that we sustainably deliver a strong return on invested capital in our African expansion.
“Scale is an important contributor to returns and this transaction is consistent with our rigorous efforts to create a strong presence with scale across Africa, and in line with our vision to be the world’s most respected African bank.”
He said with the completion of the acquisition, the merging of both banks would lead to the creation of the seventh largest bank in the Mozambican banking market.
