Business
Access Bank seeks Eurobond to boost dollar revenue
As international banks are pulling out of African continent, Access Bank Plc is strategically repositioning to take advantage of opportunities created by their exit in the market.
A major pointer to the agenda was recent revelation by the lender that it is considering selling dollar-denominated securities in the domestic market to fund its expansion plans and boost its capital base.
According to the Managing Director, Roosevelt Ogbonna, during a media parley in Lagos, the securities would be issued in two tranches. While one of the tranches would be targeted at Development Financial Institutions (DFIs), the other would be sold on the open market.
Last week, Access Holdings, through its commercial banking division, Access Bank, completed the process of taking ownership of the Angolan operations of Standard Chartered Bank (StanChart), a multinational lender based in Britain but operating from Africa, Asia and the Middle East.
The Group in a statement disclosed that transactions targeting StanChart’s subsidiaries in the Gambia, Cameroon, as well as its consumer and private banking business in Tanzania, are to be finalised soon.
The new acquisitions come with the advantage that could help “strengthen the quality of our earnings from both countries by significantly growing our share of the Corporate and SME banking in the two markets,” Ogbonna had stated, adding that “the combinations represent another significant step towards our broader vision of becoming the World’s Most Respected African Bank.”
West Africa’s biggest lender by assets is steadily deepening its foothold in Southern Africa, regarded as the continent’s most lucrative region for banking business.
Analysts see procuring StanChart’s unit in Angola, the region’s largest oil producer as strategic to firming up its grip on the market, crucial to its ambition of ranking among the top five financial institutions in Africa by 2027.
Early last month, Access Bank UK announced the official opening of its Hong Kong branch (a restricted licence bank), saying the expansion represents a key milestone in its global growth strategy and underscores its commitment to serving clients in the Asia-Pacific region.
The launch of the Hong Kong branch establishes Access Bank UK, as the first West African bank to enter the territory, a groundbreaking move to facilitate and accelerate trade flows between Asia and Africa.
Access Bank currently operates in London and Paris markets and plans to expand to the United States of America market latest in the first quarter of 2026, authorities also said.
“By the first quarter of 2026, we will have Access Bank USA. We are going to be in the USA market. We will be in the global market and we will have global conversations and deal with different counterparties who operate across the world, Ogbonna said.
“So, we have started something we refer to as an aggregator strategy. There is no point in being a pan-African banker when you have zero impact. So, it is very clear to us that in every market, we have to compete locally, and we have to be a dominant bank in the local market.”
Low-hanging fruits
At the recent press briefing, Ogbonna, who did not reveal how much the lender was seeking to raise, said the recently oversubscribed FX bond of the Federal Government would serve as a guide for the lender. Nigeria had raised over $900m in its first-ever Domestic FGN US Dollar Bond, which opened in August.
The MD also pointed out that as international banks were pulling out of the African continent, it was important for a local bank to take advantage of the opportunities in the market.
“With international banks pulling out, there has to be a local bank, a local African bank which is local in every market that takes significant advantage of those opportunities in African free trade,” he said.
Cautious optimism
While some analysts think the bank’s plan to sell dollar-denominated securities is a smart way of creating legitimate avenue for those holding illegal dollar liquidity in the country to bring them out for investment, others think it is a way of capturing Nigerians in the Diaspora who wish to invest in dollars back home.
There are also those who see the move as trying to meet a need created by the worsening volatility of the naira, which is increasingly making securities denominated in the local currency less attractive.
They, however, cautioned that the process, which is likely to become the order of the day due to the success recorded by FGN US dollar bond, should be handled in a way that it will not create another dollar demand pressure that will further put pressure on the naira.
Victor Chiazor, investment expert and head of research at FSL Securities, while noting the expected popularity of the dollar-denominated securities, however, expressed concern that it may encourage domestic players to convert their naira holdings into dollars, which could weaken the value of the naira.
“For us, we hope this does not become a frequent pattern within the Nigerian economy as it has the tendency to further increase the level of dollarisation of the economy,” he said.
Executive Vice-Chairman, HighCap Securities, David Adonri said the move will allow domiciliary account holders to earn income on their previously non-interest-bearing deposits. In addition, he believes that the bond will reduce capital flight because the interest payments will remain in the local economy rather than being transferred abroad.
“Generally, it is an attractive investment outlet for domestic investors who have been yearning for investment in dollar-denominated assets locally. It will deepen the country’s capital market,” Adonri said.
On his part, the Managing Director of Arthur Steven Asset Management, Olatunde Amolegbe, noted that in Nigeria, a large number of citizens hold significant amounts of dollars in domiciliary accounts, which are not invested or used to stimulate economic activity.
Amolegbe believes that the domestic dollar bond offers a solution to this problem, providing a way for these idle funds to earn interest while also allowing the bondholders to benefit from holding a stable reserve currency, such as the US dollar.
For Femi Ademola, Managing Director, AIICO Capital, the dollar securities provide a safe investment opportunity for those holding foreign currency, as it allows them to invest in dollars, “alleviating their concerns about potential naira devaluation”.
