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Access Holdings pushes for Africa’s dominance
Leading financial services group, Access Holdings Plc is exploiting strategic avenues in its concerted efforts towards achieving the goal of becoming one of the top five financial institutions in Africa by 2027.
The latest of the steps was the commencement of its N351 billion capital raising through a Rights Issue otherwise called an offer for subscription, which opened on Monday, July 8, and will close on Wednesday, August 14, 2024.
The Central Bank of Nigeria (CBN), on 29 March, directed commercial banks in Nigeria with international authorisation to shore up their capital base to N500 billion and national banks to N200 billion. It also instructed non-interest banks with national and regional authorisation to increase their capital to N20 billion and N10 billion respectively. The recapitalisation exercise is expected to commence from 1 April to 31 March 2026.
Consequently, the shareholders at the Access Holdings’ second Annual General Meeting (AGM) held in Lagos, unanimously backed the group’s plan to establish a capital raising programme of up to $1.5 billion. They also agreed to the subset initiative to raise N365 billion specifically, through a Rights Issue of ordinary shares to its shareholders.
The proceeds of the Rights Issue will be used to support ongoing working capital needs, including organic growth funding for the group’s banking and other non-banking subsidiaries.
“A subset of the group’s capital raising programme aiming to generate up to US$1.5 billion, the Rights Issue is designed to strengthen the Group’s financial footing and support ongoing working capital needs, including organic growth funding for its banking and non-banking subsidiaries.
“Access Holdings Plc (‘the Company’) is pleased to notify its esteemed shareholders and the Nigerian Exchange Limited (‘the Exchange’) that the Company has obtained the approval of the Securities and Exchange Commission (‘the Commission’) to execute a Rights Issue of 17,772,612,811 Ordinary Shares of N0.50 each at N19.75 per share, on the basis of 1 Ordinary Share for every 2 Ordinary Shares held as at June 7, 2024”, Access Holdings said.
Head of Media and Public Relations, Access Holdings Plc, Olakunle Aderinokun, said in a statement seen by our correspondent that the capital raising was necessary for the group to maintain its top position in the financial services sector.
The statement quoted the Acting Group Chief Executive Officer of Access Holdings Plc, Bolaji Agbede, as saying the offer for subscription will further expand the group’s growth strategies and financial strength.
“The commencement of the Rights Issue subscription is an important step in our growth strategy and capital-raising plans, reinforcing our financial strength and accelerating our strategic ambitions. However, this execution is more than a capital raise; it is a pivotal process that will propel us towards our goal of becoming one of the top 5 financial institutions in Africa by 2027.
“We are confident that this exercise will solidify our position as a market leader and drive sustainable growth for years to come. Access Holdings’ Rights Issue offers 17,772,612,811 ordinary shares of N0.50 each at N19.75 per share.”
Unwavering optimism
The Chairman of Access Holdings, Aigboje Aig-Imokhuede, is confident that the Group would raise $300 million in capital for Access Bank, considering the bank’s strong market position and shareholders’ support.
Mr Aig-Imokhuede, in a recent interview with the News Agency of Nigeria, explained that having announced to embark on a capital raising through Right Issue, he was confident that the group’s shareholders would support the bank in the journey, adding that the holding company had a unique relationship with the capital market in Nigeria and internationally.
His words; “It is not the first time CBN is coming up with such policy. Recall that in 2004 when CBN announced that all banks must recapitalise to the tune of N25 billion and Access Bank had about N3 billion of capital. Between 2004 and 2007, our team, when I was the CEO of the bank, raised two billion dollars of common equity capital.
“Therefore, in 2024 when Access Holdings is much older, wiser, stronger, larger, and significantly respected by the capital market with over 800,000 shareholders, raising 300 million dollars in capital for Access Bank, its banking subsidiary, is not really much of a challenge.
“We signaled to the market first that we will be doing a Right Issue, which means that we must carry everybody along, in spite of our large institutional shareholders.
“Nonetheless, we believe in ensuring that shareholders, either large or small, continue with us on our journey. They have always supported us when need be for good reasons, because they believe in the company and the performance that would be delivered subsequently to such capital raising exercise.
“What is on the mind of our shareholders now is recapitalisation and they are also concerned about how their company continues to deliver returns”.
Significant international operations
In terms of performance and expectations from Access Holdings going forward, Mr Aig-Imokhuede stated that the earning profile of the group, which is spread across Nigeria, Africa and outside Africa subsidiaries, is very robust.
He said: “As an investor, you always look to see whether there is deep concentration where the profit is coming from; in our case, these areas are spread across three core areas that is of significant interest to local and international investors.
“If you look at the performance of banks in the year ended 2023 financial reports, you will see that all banks in naira terms have increased significantly their profitability as a result of the devaluation.
“But that isn’t the case with Access Bank, whose revaluation benefits come from the fact that it has significant international operations because it is not a function of holding large foreign currency balances.
According to him, Access Bank, United Kingdom, for example, is the largest and probably highest performing Sub-saharan African bank that has a license in the UK and makes hundreds of millions of naira of profit from the UK.
The chairman further said that this is not an accounting benefit that comes in the year 2023, but will continue with the operations of the bank in France, and across other European, Asia and Middle Eastern jurisdictions.
“We can see that the foreign currency benefit of profit in those locations is going to also accrue to the holding.
“The holding as an investor is also thinking of retail banking, which is like a utility. A retail banking with about 60 million customers is enough to sustain the bank anytime, irrespective of how volatile or uncertain the market is,” he said.
Now operational in 22 countries across the globe, with 15 in Africa, Access Holdings has established itself as one of the continent’s most trusted performers over the last 20 years.
The Group reported robust financial results for the year ended December 31, 2023, with a 335 percent increase in pre-tax profit to N729 billion and an 87 percent surge in gross earnings to N2.59 trillion. It also reported a remarkable 306 percent growth in profit After Tax to N619.32 billion, from N152.20 billion posted in the year 2022.
A final dividend of N1.80 kobo per every N0.50 kobo ordinary share for the 2023 financial year was paid to shareholders, representing a 28 percent increase from the previous year.
