Business
Access Bank pushes to rule African market

By OBINNA EZUGWU
With its successful ‘merger’ with Diamond Bank in 2019, Access Bank Plc made a bold statement of intent to dominate the Nigerian banking space. It was a transaction that instantly made it the biggest bank in the country, now with assets base of N7.28 trillion, and customer base of 31 million.
This total has ensured it remains the top bank in the country by deposits at N5.6 trillion, compared to First Bank at second position with N5.4 trillion, United Bank of Africa, third with N4.6 trillion, and Zenith Bank fourth with N4.4 trillion.
Profitability wise, however, Zenith still leads the pack, finishing 2019 with N208.8 billion PAT, followed by Guaranty Trust Bank (GT Bank) with N196.8 billion, while Access came third with N97.5 billion, still an improvement from the 2018 figure of N94.8 billion.
The bank’s numbers have doubled since 2018 following the Diamond merger. In Q1 2020, it posted N40.93 billion PAT, a 0.53 percent decline from N41.15 billion reported in the first quarter of 2019. This evidently came on account of Covid-19 pandemic which has slowed down economic activities. In the same quarter of 2018 and 2017, before the merger, the bank’s PAT came in at N22.1 billion and N22.4 billion respectively.
But Access has shown, regardless, that Diamond merger was never just about overtaking the country’s tier one behemoths to become Nigeria’s biggest bank, but part of a sustained push for continental dominance and global recognition. The bank has in the past few years, led a banking expansion trail in Nigeria, intensifying domestic and international operations by increasing branch networks in its domestic market and instituting subsidiaries abroad.
Already in 12 countries, including United Arab Emirates, United Kingdom and with representative offices in India, Lebanon and China, serving 31 million people with 28, 121 employees, Access has since set its eyes beyond these numbers, aiming at 22 countries in the next five years. This intent was further emphasized with the acquisition, recently, of Kenya’s Transnational Bank.
For the bank’s Chief Executive Officer and Managing Director, Mr. Herbert Wigwe, the plan is clear: “The idea,” he said, “was never to create a bank for just Nigeria. It would be Nigerian in ownership but global in nature, following best practices.”
The acquisition of Transnational Bank is a bold move towards establishing a foothold in Kenya, following in the footsteps of GT Bank and UBA, the two Nigerian banks already in the country, and perhaps a spring board for deeper penetration of the East African economy, of which Kenya is the largest.
The Kenyan move has, however, witnessed a bit of push back from Kenyans, exposing just how challenging building an African conglomerate can be given the perpetually lurking distrust. Reactions in the East African country to the acquisition have ranged from accusing Nigerians of taking over the country’s economy, to sundry name calling.
But a contribution to the debate by Prof. XN Iraki, an Associate Professor at the University of Nairobi, Kenya, who in article that went viral, shared his concerns about the growing influence of Nigerians in the country, even as he paid tribute to the industry of Nigerians, stands out.
“Guaranty Trust (GT) and UBA already have a presence here,” Iraki wrote. “Why is the buyout so significant to the banking sector and the Kenyan economy? Why didn’t we notice it? Is that the last Nigerian purchase? First, the entry of Nigerian lenders into the Kenyan market was well planned. It started by softening the Kenyan mind with Nigerian churches and Afrosinema movies. That changed the hardened image of Nigerians as corrupt and happy-go-lucky—an outdated image.
“From my interactions, Nigerians are serious and focused. That focus and single-mindedness are often mistaken for pride and arrogance. Once they set their goals on something, they usually get it. The means can be contested, excluding juju. For every Nigerian caught on the wrong side of the law, nine others are doing the right thing, not just in their country, but somewhere in the world. One of them supervised my dissertation.
“I recently met a Nigerian who was a member of parliament in South Africa. In America, they are top administrators in universities, medical doctors, engineers, financial analysts and other lucrative jobs. It has been predicted that Nigeria will soon be Africa’s superpower; and why not? The country has gone through thick and thin, from coups and anti-coups and even a civil war, like the other superpower – USA.”
“For the Nigerians, marrying our girls seems to be part of their grand strategy to get into the Kenyan market; through genes, across generations. What else will Nigerians go for after our banks? Are banks their Trojan horse into our economy? And, more curiously, why is Kenya on sale? Not that I am an economic nationalist, but what are we buying ourselves?
“Some observers argue that lack of buffer communities like Indians and whites may have worsened the ethnic contest among the big Nigerian ethnic groups, and lately minorities. I need to make a fact-finding visit to Nigeria after Covid-19.
“The other prerequisite for Nigerian superpower status includes a significant population (read market) and educated elite that has footprints in almost all the countries in the world. Oil did not prove a reliable conveyor belt to economic growth; all eggs were put in one basket. With Covid-19, the oil curse seems real.
“The best conveyor to Nigerian superpower status is financial services. Oil needs a countervailing force. By making their banks global, Nigerians – like the British and Americans before them – will leverage onto other sectors. They can control industries, institutions, sectors – and politics indirectly. I am sure you will not see an American, Briton or Nigerian as a cashier in a bank. But who decides how the profits will be shared?
“Access Bank’s entry into the Kenyan market is more than the acquisition of a lender connected with former political power wielders. It is likely to disrupt the banking industry further. The demand for more bank capitalisation by the Central Bank of Kenya and investment in fintech were the first disruptors. We can’t discount Covid-19 for now.
“Remember Access Bank is more capitalised, to the tune of about $18 billion (Sh1.9 trillion). The bank spans three continents, 12 countries and has 36 million customers. Compare that with Kenya’s biggest bank by capitalisation or customers. How will local banks compete with such a big bank? Some could take solace in the fact that the biggest banks in Kenya are indigenous, such as KCB and Equity. Others are merging, including NIC and CBA. But we can’t rest on our laurels.”
Transnational, which was set up in 1984 under the name of Transnational Finance Company, initially as a non bank financial institution, is largely associated with the former Kenyan President, late Daniel Arap Moi and battled controversy over the years, accused of serving as conduit pipe for money laundering. But it has remained in business, expanding its branch network to 28 across the country; and as of 2013, had total assets of $113.6 million.
Access plans to use Transnational’s existing expertise in agricultural financing, while leveraging its resources, to improve other business segments and expand into regional market.
“The Bank’s vision is to be the World’s Most Respected African Bank and our entry into the Kenyan market, a gateway in East Africa, not only brings us closer to that vision but enables our customers tap into our extensive global network that translates into immense business opportunities, robust and efficient digital solutions, competitive products and unrivalled customer experience,” Access said in a statement to the Nigerian Stock Exchange announcing the completion of the 100 percent acquisition of the Kenyan bank.
The latest acquisition notwithstanding, Access is not relenting in its stated objectives. Though already in Burundi, Cameroon, Côte d’Ivoire, Democratic Republic of Congo, Gambia, Ghana, Rwanda, Sierra Leone and Zambia, Wigwe has since hinted at plans to open operations in four additional African countries within the year.
Indeed, a few days ago, Access Bank Zambia Limited announced that it was in advanced discussions with Cavmont Capital Holdings Zambia Plc regarding a possible merger with Cavmont Bank Limited. Part of the bank’s ‘Africa’s Gateway to the World’ campaign, a strategic initiative which aims to promote ‘access to finance’ in Africa and globally launched in 2018, Wigwe says the ultimate agenda is to be Africa’s gateway to the world.
“We want to have subsidiaries across 22 countries over the next five years, with strategic plans to be present in the major trade corridors in the African continent. Building on our successful expansion into Kenya, we will also be making entries into Angola and Mozambique,” he had said in an interview with Bloomberg few weeks ago.
“At the moment, Access Bank does not have a presence in the Francophone region of Africa, and we will be working to see that this is changed in the coming years. By 2023, Access Bank will have consolidated its position as Africa’s gateway to the world with about 100 million customers in Nigeria and an additional 20 million customers across our African subsidiaries.”
Wigwe went further to lay down some details about how it’s to be pursued: “Access Bank is set to revolutionize the payment and banking landscape in Africa. We would soon be introducing a new payment system that would allow users enjoy a secure, seamless and convenient service when making payments at Merchant locations without cash or card.
“When launched, the system would help Access Bank’s drive towards bridging financial literacy gaps in Nigeria and indeed Africa, as the elderly or underserved individuals who cannot cope with the complexities of internet banking and mobile applications will be able to transact with ease.”
Access Bank through the years:
Access received its banking license from the Central Bank of Nigeria (CBN) in 1989, originally as a corporate bank, and listed on the Nigerian Stock Exchange in 1998. In 2002, it was taken over by a core of new management led by Aigboje Aig-Imoukhuede, its former MD/CEO and Wigwe who currently holds the position. Ever since it’s been a story of rapid rise to prominence through mergers and acquisitions, starting from 2005 when it acquired Marina Bank and Capital Bank by merger and subsequently began continental expansion.
In 2007, Access established a subsidiary in Banjul, Gambia, which has since grown to have a head office and a number of branches. In 2008, the bank acquired 88percent shares of Omnifinance Bank. The same year, it acquired 90 percent of Banque Privée du Congo, which South African investors had established in 2002.
Subsequently, the bank acquired 75 percent shares of Bancor SA, in Rwanda, a bank established in 1995. It later acquired one of Nigeria’s major bank, Intercontinental bank Plc in 2012, which officially announced its emergence as a player.
This was followed up by opening of subsidiaries in Freetown, Sierra Leone, Lusaka, Zambia and in London, United Kingdom.
The bank’s first huge milestone, however, came in 2012 with the complete acquisition of Intercontinental Bank. Following the bold move, the bank became one of the largest four commercial banks in Nigeria with over 5.7 million customers and 309 branches.
But the watershed moment came in December 2018 when it successfully acquired Diamond Bank, in a merger completed in early 2019. The acquisition Kenya’s Transnational Bank, including 100 percent of shareholding and 28 branches around Kenya, is another step forward in the bank’s stated objective to be Africa’s gateway to the world.