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Access Bank Buys BancABC Of Botswana With Cash

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Nigeria’s Access Bank has agreed to buy a majority stake in BancABC, the African Banking Corporation of Botswana for cash.

The new acquisition comes a month after the Nigerian bank acquired a South African bank.

Access Bank is expanding across the African continent to counter stagflation and dollar shortages in Nigeria that have frustrated businesses, shrinking the lending market.

The 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.

The deal 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

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The Rise And Rise Of Access Bank

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The recent revelation that Access Bank Plc is among the list of financial institutions from Africa and the Middle East that have expressed interest in the acquisition of Union Bank Plc and other African assets of Atlas Mara Group, a Pan-African banking group, is a cheering news.

Atlas Mara Limited, the London Stock Exchange-listed pan-African banking group started by Mr. Bob Diamond, it was gathered has received a number of approaches for its 49.97 per cent holding in Union Bank of Nigeria.

Indeed, listing Access Bank Plc among the suitors is a clear reflection of the resolve of the financial institution headed by Herbert Wigwe, its chief executive officer, not to relent in its aggressive expansion drive.

From a tiny bank in 2002, Wigwe who took over from his close friend and business partner, Aigboje Aig-Imoukhuede, in 2014, has completely transformed the bank which then was ranked 65th among 89 banks operating in the country.

Over the years, Access Bank has evolved from an obscure 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; a feat which has been achieved through a robust long-term approach to client solutions – providing committed and innovative advice.

Access Bank has built its strength and success in corporate banking and is now applying that expertise to the personal and business banking platforms it acquired from Nigeria’s International Commercial bank in 2012.

As part of its continued growth strategy, Access Bank has continued to focus on mainstreaming sustainable business practices into its operations. The bank strives to deliver sustainable economic growth that is profitable, environmentally responsible, and socially relevant.
Wigwe has helped to develop some of Africa’s biggest companies in the construction, telecommunications, energy, oil and gas sectors through Access Bank.

Clearly, the news about Access Bank’s interest in Union Bank which came exactly a day after the former announced its completion of all regulatory procedures that led to the renaming of Grobank Limited as Access Bank South Africa Limited, showed that the Lagos-based financial institution is not ready to rest on its laurels.

The deal was finalised after Access Bank’s acquisition of controlling shares in the former Grobank Limited, South Africa. With this acquisition, Access Bank South Africa Limited is positioned to deliver a robust banking operation that connects key African markets.

During the official closing ceremony in Sandton recently, top executives of the two banks were upbeat about new opportunities for clients, noting that the bank will continue to support all its stakeholders, while opening doors to growth opportunities both in the short and long term.

To Wigwe, the acquisition in South Africa sealed Access Bank’s commitment to delivering its strategic aspirations of becoming Africa’s Gateway to the World, in line with its vision to be the ‘World’s Most Respected African Bank.’

“We look forward to the many opportunities our collective experience and deep understanding of the African market brings to our valued clients, and the journey ahead being one of great promise for our institution and the continent,” he added.

On his part, the CEO of Grobank Bennie van Rooy said, “This is an extremely exciting day for the South African banking industry. Our corporate customers will now have increased access to trade finance, treasury, international payments and loans through the wider distribution network offered by Access Bank’s presence in the key trade corridors that connect Africa to the rest of the world.
“Banking with Access Bank South Africa means greater security as well as access to more products and services through a best-in-class digital platform, and a full retail banking suite will soon be on offer.”

Last month, Access Bank Plc also entered into a definitive and binding agreement with ABC Holdings Limited to acquire 78.15 per cent shareholding in African Banking Corporation of Botswana Limited (BancABC Botswana). The transaction, which is subject to regulatory approvals and customary conditions precedent, is expected to close before the end of this quarter.

ABC Holdings is a subsidiary of London Stock Exchange listed group – Atlas Mara Limited.
The South African country is renowned for its quality sovereign credit rating and stability.
Access Bank’s market entry in the country as well as the sub-region, is expected to further solidify its strategy as, “a strong banking partner in key verticals across retail and corporate banking, including especially supporting trade in payments across southern Africa and Sub-Saharan Africa more broadly.”

Also commenting on the deal, Wigwe, said: “We remain committed to a disciplined and thoughtful expansion strategy in Africa, which we believe will create strong, sustainable returns for our shareholders and stakeholders at large, over the medium and long-term.

“The establishment of Access Bank through this acquisition in the Republic of Botswana will position the bank to deliver a more complete set of banking solutions to its clients active in and across the SADC and COMESA regions.

“This transaction complements our recent strategic growth acquisitions in South Africa, Zambia and Mozambique. We are building a bank of the future that Africans across Africa and the world would be proud of and look forward to welcoming the employees, customers and other stakeholders of BancABC Bostawana to Access Bank.”

In the string of expansion across the African continent – including Cameroon (operating license), Kenya (Transnational Bank), Zambia (Cavmont Bank), among others, the bank has said it intends to leverage the African Continental Free Trade Area agreement (AfCFTA) to expand its footprint to 20 countries across the continent.

According to Wigwe, across Africa, there is an opportunity for the bank to expand to high-potential markets, leveraging the benefits of AfCFTA.
He said AfCFTA, among other benefits, would expand intra-Africa trade and provide real opportunities for Africa.

Wigwe said the bank would use its office in London to expand representative offices in India, Lebanon and China.
He stated that the plan is for the bank to establish its presence in 22 African countries so as to diversify its earnings and take advantage of growth opportunities in Africa.

According to him, Africa has enormous potential and there are opportunities for an African bank that is well run, that understands compliance and has the capacity to support trade and the right technology infrastructure to support payments and remittances, without taking incremental risks.

“We believe that we are best positioned to basically do all of that. Our focus is to become an aggregator in Africa and we are building a global payment gateway and providing trade finance support and correspondent banking across the continent. We are focusing on the key markets.

“The approach would always be that in the country we wish to go to, that we have the right skills. We would not just be a drop in the country in which we are present, we would make sure that we have an impactful presence in each of the major countries in which we are present.

“In doing this, we are also mindful of the country we are going to so as to make sure that it is of benefit to the bank. As we do this, we are working with our friends and partners.

“We are diversifying our earnings away from volatile markets as well and we are orchestrating our operations from the global payments gateway and ensuring that using Access Bank UK, providing corresponding services from digital platforms, the overall profitability of our franchise,” he explained.

Commenting further, on AfCFTA, he said the bank would use its digital framework to benefit from the deal.

“Coming to Nigeria, we think we need to continue to entrench ourselves in the local market because there is still so much work to be done.

“So, we are doing everything possible to satisfy our customers and also to ensure that our channels are adequately secured. We are also ensuring that our staff are very efficient,” the CEO said.

In view of the opportunities that exist in the market, Access Bank recently disclosed plan to transit to a holding company (HoldCo) structure. The bank has received the Approval-In-Principle from the Central Bank of Nigeria for the restructuring and the HoldCo will consist of four subsidiaries in order to tap into the market opportunities that are available in the consumer lending market, electronic payments industry and retail insurance market.

Access Bank Group will consist of Nigeria, Africa and international subsidiaries, while the payments subsidiary will leverage the strong suite of the bank’s assets, Wigwe said.
“Going into the fourth year of our 5-year cyclical strategy, our focus remains on consolidating our retail momentum and expanding our African footprint in a sustainable manner,” Wigwe said.

Also, in terms of its financial performance, despite the challenging operating environment, Access Bank delivered strong results in the first quarter (Q1) ended March 31, 2021 with the gross earnings printing at N222.1 billion was recorded, up by six per cent above the figures posted in the corresponding period of 2020. PBT rose by 30 per cent to N60.1 billion, from N46.2 billion, while Profit After Tax (PAT) grew by 28 per cent to N52.6 billion compared with N40.9 billion in 2020 on the back of a 13 per cent growth in operating Income and a 16 per cent reduction in interest expense.

According to Wigwe, the performance showed the strong capacity of their business to generate sustainable earnings on the strength of their balance sheet, diverse revenue streams and their dedicated people.

“As a result of effective implementation of our cost reduction strategy, operating expenses remained flat, despite the inflationary environment and increased regulatory cost. Our retail banking business also showed steady growth with a 112 per cent increase in revenue to N57.5 billion and a 941,631 new customer sign-on via our financial inclusion drive during the quarter. This improvement is evidenced by the consistent and robust savings account growth to N1.3 trillion , leading to a significant reduction in our cost of funds,” he said.

He said the increased adoption of digital channels and the growing customer base, the bank recorded a 29 per cent growth in USSD transaction value and 40 per cent increase in mobile and internet banking transaction value.

“In line with our risk appetite and efficient risk management, our asset quality continued to improve as guided with NPL Ratio of4.0 per cent (Dec. 2020 4.3 per cent), as we intensified our recovery efforts.

“Likewise, we expanded our loan portfolio cautiously as reflected by the marginal growth in our net loans and advances to N3.65 trillion year-to-date (Dec 2020: N3.61trillion).
“Furthermore, we maintained robust capital and liquidity positions, well above regulatory levels with a Capital Adequacy Ratio of 22.2 per cent and a liquidity ratio of 48.3 per cent, positioning us to support our customers across various markets and adequately execute our expansion strategy.”
Therefore, it is expected that the bank’s aggressive expansion drive will see it contribute positively in rebuilding economies in Africa that have been ravaged by the pandemic through its support to micro, small and medium scale enterprises, corporates as well as households.
Pix: Wigwe.jpg

QUOTE: As a result of effective implementation of our cost reduction strategy, operating expenses remained flat, despite the inflationary environment and increased regulatory cost. Our retail banking business also showed steady growth with a 112 per cent increase in revenue to N57.5 billion and a 941,631 new customer sign-on via our financial inclusion drive during the quarter. This improvement is evidenced by the consistent and robust savings account growth to N1.3 trillion , leading to a significant reduction in our cost of funds.

 

Source: Thisday

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Nigeria Devalues Naira, Official Rate Now 411 To Dollar

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Nigeria let the naira weaken to a record low against the dollar on the official market on Friday, according to traders, who said this could be a move by the central bank to unify multiple exchange rates. 

Having traded within a band of 380 and 381 to the dollar since July last year, the naira hit a record low of 419.75 against the dollar on Friday. It then closed at 411.25 — the last closing rate for the naira on the over-the-counter spot market. The central bank did not respond to calls for comment and no quotes have been available on the naira’s official rate since Tuesday. It weakened further on the black market, traders said.  

“What the central bank is saying is that the (OTC) spot rate will be the official rate because that’s where the largest volumes trade,” one currency trader at a major Nigerian bank told Reuters. 

Nigeria operates multiple currency regimes, which frustrate businesses and have prompted calls from the World Bank for the rates to be unified to attract investment. Rising dollar demand has put pressure on the naira as providers of foreign exchange, such as offshore investors, exited after the COVID-19 pandemic triggered a fall in global oil prices. 

Central Bank Governor Godwin Emefiele in February said the currency was trading at 410 naira on the official market while the government has been using that rate for its business as it tries to boost earnings from crude sales, its main export. 

The World Bank has linked approval of a $1.5 billion budget support loan to currency reforms. The central bank had been trying to unify the rates and boost the dollar supply through direct interventions. It revised the futures rate on the naira upwards last month to ease pressure on the currency after quoting the 150-day futures contract at 435.81 naira, in its first dollar sales to foreign investors this year. 

The bank is due to hold its interest rate setting meeting later this month with economic data on inflation and first quarter growth figures expected from next week. It has kept rates on hold to support the economy hobbles by lower oil prices and impact of COVID-19 pandemic but dollar shortages have been contributing to rising inflation, a key source of concern for the central bank.

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UBA Raises Stake In Customers’ Rewards

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…10 Customers Get N1m Each In Savings Promo

As part of its efforts to boost savings culture in Nigeria, United Bank for Africa (UBA) Plc has rewarded 10 loyal customers to the tune of N1 million each in its just concluded ‘UBA savings Promo.

The promo is a new initiative of the bank which embraces all savings customers of the bank from the six geographical zones in Nigeria with the criteria of simply having saved a minimum of N10,000 in three months.

The electronic raffle draw, which was held virtually at the weekend, was witnessed by the relevant regulatory bodies including the National Lottery Regulatory Commission and Consumer Protection Council to ensure transparency and accountability.

The winners who emerged were Emeka Onyemauchi, Ezeigbokwe Oluebube Purity, Omoniyi Jaiyeola, Olawale Omotayo Idowu, Zaharadeen Umar, Aliyu Bakari, Samuel Esua, Joseph Eze, Deborah Folusho Adebayo and Lucy Chinyere Adim

The Head Personal Banking and Product Development, Osita Ede said this promo is slated to increase the bracket of winners in the bank’s savings customer base, promote saving culture and rewards their customers.

Ede said: “We are doing this because it is actually a way of touching lives and show appreciation to our loyal customers and also to encourage savings because we know that deep down when you look at the funds that are out of the financial institutions you still have a significant amount that is not in the system. So, it is also a way of driving financial inclusion, encourage savings and then rewarding and showing appreciation to our customers.”

“What it takes to qualify for this draw is not much the criteria is so low that everyone can participate and emerge a winner. UBA has always had the wise savers promo, but this year, we have now launched something different. This is the first quarterly draw this year and ten customers won N1 million each.

“Bumper savings account is our flagship savings product but there are different reasons why people save. So, what we did was to have a draw that speaks specifically to bumper account. And every quarter, the months we don’t have the bumper draw, we now expand it to all savings account in the bank.”

“This Promo is something we at UBA are proud of because it is an opportunity for us to change some lives. And for those you who do not win today, there would be quarterly draws every quarter,” he added.

Savings account holders eligible for this draw include Target, Bumper, Next Gen, Savings, Teens & Kiddies and this draw noted 862,000 customers who qualified for the draw.

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