H1'2022: Access Holdings grows gross earnings to N592bn
Herbert Wigwe

By Okey Onyenweaku

Tough times it is said bring out the strong man in achievers. This evidently today would be the lot of Dr. Herbert Wigwe, the CEO and Group Managing Director of Access Bank Plc, who comes across even in these tough COVID-19 times as surely a man with a mission.

Less than one year after leading the bank to take the nation and continent’s banking sector by storm through the landmark merger between Access Bank and Diamond Bank, the current COVID 19 health storm set in and Wigwe has therefore had the challenge of overseeing two very daunting storms within one calendar year!

Size matters

In all of these, it is to his credit that Access Bank remains a leading Nigerian banking institution and reportedly also, the largest bank in Africa by customer numbers.

A graduate of Accountancy from the University of Nigeria, who also holds an MA in Banking and Finance from the University College of North Wales (now Bangor), an MSc in Financial Economics from the University of London, while also being an Alumnus of the Harvard Business School Executive Management Programme, Wigwe had, alongside his long-time business partner, Aigboje Aig-Imoukhuede, moved to acquire the small commercial bank, Access Bank, which in 2002, was ranked 65th out of the 89 banks in Nigeria.

Today Access Bank is a much stronger tier-1 franchise, with operations across 12 countries in three continents and some 36 million customers and counting. As at the last count, it also had some 28,000 staff spread across more than 600 branches, and equally deploying as much as 3,100 ATMs and 32,000 POS terminals. With all of these investments, the terminology of having ‘too-big-to-fail’ financial services institutions finds a somewhat fitting berth. And it is to Wigwe’s credit that he daily continues to labour and strive in guiding his team to make sure that Access Bank remains thriving and afloat.

Two 2020 incidents would help to put this in perspective.

In the first instance, after weeks of the Coronavirus-induced lockdown of economies across the globe, stress began to set in for businesses. Wigwe and Team Access reviewed the situation and opted on the imperative of taking some cost-saving measures. When some misunderstanding however arose as to the content of that package, the bank went into quick damage control mode to explain its side of the story.

Again, a second instance of policy misunderstanding ensued when the ‘dams were opened’ on account of the bank charging what the public perceived as double Stamp Duty rates. To calm frayed nerves, the bank not only explained that it was merely a collecting agent on behalf of the Federal Government of Nigeria, it moved to reverse all withdrawals, refund all the sums involved and absorb the losses. ‘The customer is king’ and Wigwe and Team Access know that it is indeed a first remit for sustainable business to ensure that dissatisfied public and dissatisfied customers are pacified.

Experience well-honed and deployed

Wigwe’s career in the financial services sector has spanned almost three decades with 17 of those years spent as Deputy Managing Director at Access Bank. And for six years now, he has held the captain’s bank at the increasingly expanding Access Bank brand.

Under Wigwe’s watch, Access Bank has continued to build on its reputation of being one of Nigeria’s foremost corporate banking brands through practically helping to develop some of Africa’s biggest companies in the construction, telecommunications, energy and oil and gas sectors.

Another area that Access Bank under Wigwe has seemingly excelled is the turf of Corporate Social Responsibility and innovative products and services. Almost no month passes without word coming out about the bank being engaged in one noteworthy activity or the other. From sports to women empowerment, Access has come to carve a niche for itself as a bank that pays attention to avant-garde issues. In April 2019 for example, Access Bank listed Africa’s first Climate Bonds Standard fully certified corporate Green Bond on the NSE and FMDQ.

Herbert Lion heart

In all of its engagements however, one that has marked Access out and demonstrated that indeed Captain Wigwe does have a ‘Lion heart’ is the relentless way he continues to pursue the Access Brand’s continental and global expansion project against all odds.

But this also has a history as right from those 2002 beginnings, it was already evident that the chief drivers of Brand Access Bank Plc, Aigboje Aig-Imoukhuede and Herbert Wigwe were clearly not just going to lie down there and accept to play second fiddle. They had grooming. They had professionalism. They had grit. They had excellence. And they had ambition.

Leaving the comfort of their hitherto secure positions at GTBank, it was clear that their next venture was going to be quite strong. They took the bull by the horns.

From being one of the smaller players in the field, Aig Imoukhouede and Wigwe made pitches for bigger players like Afribank and Union Bank. But while both forays were scuttled externally, inwardly, they grew thicker skins and their efforts were subsequently to pay off with the acquisition of Intercontinental Bank and later Diamond Bank.

Following the acquisition of Diamond Bank which helped to securely consolidate its place in Nigeria’s Deposit Money Banks, DMBs Tier 1 club, Access has moved further afield to take up a bigger chunk of the African and global pie

Commenting on the Diamond take-over, Africa’s richest man, Aliko Dangote, had remarked:

‘From the time I have known the drivers of Access Bank; I have been in no doubt as to their capacity for dreaming up being dreams and following through on them.’

Field returns

Since its merger with Diamond Bank, Access Bank has posted quarter after quarter of positive returns.

In the 2019 half year financial reports, Access Bank Plc disclosed that one of the first things it did was to clean up its books through restructuring some of its clearly more contentious legacy loans.

Along this line, the bank re-classified and wrote off parts of its risk assets including it’s quite notable and headline legacy loan to Geometric Power Limited.

In the first half of the year, the bank’s gross earnings witnessed a growth of 28% to N324.4 billion in the period compared to N253 billion in the corresponding period of 2018. This consisted of 84% interest income and 16% non-interest income.

Explaining this then, Wigwe said interest income was up by 46% year-on-year and 32% quarter-on-quarter with the major contributor being the 138% increase in income from investment securities to about N107 billion.

According to him, net interest income grew by 82% year-on-year and 73% quarter-on-quarter to N15.1 billion and N155.1 billion in the half year ended June 2019 compared to the corresponding period in 2018, coming from the merger and the increased balance sheet.

He was not done: “We also saw a 34% increase in our other operating income to N24.4 billion.

“The primary reason for this increase was largely as a result of the recoveries that we’re doing. So there were increased loan-loss recoveries to the tune of N13.9 billion.

“Loans and advances to customers stood at N2.6 trillion at the half year of 2019, up by 32% from N1.9 trillion in 2018.’

This was as NPL ratio trended down to 6.4% with significant improvements from 10% as of March 2019, and customer deposits closed at N4.18 trillion, a 63% increase from the year ended 2018’s N2.56 trillion.

The bank’s capital adequacy stood at 21.5%, which is a 70 basis points increase from the half year in terms of the corresponding period last year. Liquidity ratio was well in the excess of the regulatory minimum at 50.3%.

Also, retail contribution to total income stood at 42% or N64 billion, compared to 18% in the corresponding period, which came at N46 billion, with fees of about N12.1 billion compared to N6.3 billion in 2018.

Additionally, the deposit mix in the period has improved from N766 billion in December 2018 to N1.9 trillion, with local deposits accounting for 55% of the total.

Speaking on Access bank’s digital platform, Wigwe said: Today, we are disbursing on the average N200 million to 4,600 different customers through the click of a button.

“We’ve set for ourselves a target of about N400 million daily to at least 20,000 customers, and we’re on the course to achieving this.

Going forward, the bank’s 3rd Quarter report for 2019 is in this respect equally instructive. In this instance, the group’s profit before tax increased from N70.268 billion in 2018 to N103.104 billion, a 47% push.

Group’s fee and commission income expanded by 53.68% from N43.527 billion in 2018 to N66.895 billion at the end of the first nine months in financial year 2019.

Unlike in 2018 also, when the group recorded negative performance in foreign exchange transactions, in 2019, its net foreign exchange loss was reversed from -N29.579 billion and it now ended in N5.15 billion positive.

The group also had gross earnings of N513.655 billion at the end of 9 month in the financial year 2019 and shareholders’ equity position jerked up by more than 25% from N490.511 billion at the beginning of the year to N614.84 billion at the end of the period.

Also, retained earnings spiked by 47.06% from N155.592 billion to N228.826 billion, while other components of equity also increased by 10% from N114.609 billion to N126.111 billion in the same periods under reference.

On its part, total assets increased to N6.606 trillion from N4.954 trillion before the merger. This represents an increase of 33% year to date.

Deposits from customers also grew exponentially by as much as 65%; from N2.564 trillion to N4.239 trillion. Also, interest-bearing borrowing spiked by 59.07% to N617.863 billion in the period, and up from N388.416 billion.

Moving to the end of the year, the lender recorded improved performance as it posted gross earnings of N576.348 billion, an increase of 32 per cent, from the N435.743 billion recorded in 2018.

At the same time, net interest income increased jumped 59 per cent from N173.578 billion to N277.228 billion in 2019, while net fee and commission income rose from 42 per cent from N52.495 billion to N74.647 billion.

Access Bank Plc therefore closed the year with a profit before tax (PBT) of N115.378 billion, up by 11.8 per cent, compared with N103.187 billion in 2018.

The board of directors consequently recommended a final dividend of 40 kobo compared to 25 kobo paid the previous year. The total dividend will come to 65 kobo having paid an interim dividend of 25 kobo earlier in the year.

Equally, deposits rose 66 per cent from N2.565 trillion to N4.255 billion, loans and advances improved from N142,489 billion to N152.825 billion, while total assets grew 44 per cent from N4.956 trillion to N7.146 trillion.

Also, not bucking this positive trend, Access Bank Plc went on to record a profit after tax of N40.9 billion in the first quarter ending March 31st, 2020, with Net Interest Income for the period at N72.2 billion, a 27% increase compared to the N56.8 billion recorded in Q1 2019.

As for profit before tax for Q1 2020, it came to N46.2 billion, 2.6% more than the N45.1 billion reported in Q1 2019. On the other hand, profit after tax decreased slightly by 0.53% to N40.9; down from N41.1 billion.

However and in appreciation of the already building economic storms, the Bank’s earnings per share for the period decreased to 121 kobo as against 139 kobo. Diluted earnings per share also decreased to 119 kobo in Q1 2020 as against 137 kobo in Q1 2019.

Half year 2020

Continuing with its positive trajectory, Access Bank went on to post a Profit Before Tax of N74.306 billion in the overly challenging H1 2020 season even as equally announced an interim dividend of 0.25K.

Significantly, and against all odds, the PBT numbers were up from the N 72.964 billion the bank had recorded in H1 2019. It also earned a revenue of N 396.8 billion for H1, 2020.

Analysts trace this increase in PBT to ‘an increase in the balance of cash flow from operating activities.’

Also, net gains on financial instruments were up by 3000%, primarily fuelled by a N103.25 billion gain on derivatives instruments even as the bank’s share price at the NSE stood at N6.45 as at the close of trading last Friday.

The Africa Prize

Notwithstanding the storms of the moment, Access Bank’s bigger fight for Africa and the world is still in front of us. Can Access Bank do it?

Underscoring the fact that it was not taking its eyes off the ball despite all odds, early this month, the bank made one more move on the Pan-African circuit when Access Bank (Zambia) Limited executed a definitive agreement with Cavmont Capital Holdings PLC on a scheme to merge Cavmont with Access Bank Zambia. A statement announcing the development, outlined:

‘Subsequent to our announcement on July 8, 2020, the Board of Access Bank Plc (“Access Bank”) announces today that its subsidiary, Access Bank (Zambia) Limited (“ABZ”) has entered into a definitive agreement with Cavmont Capital Holdings Zambia Plc (“CCHZ”) regarding a proposed acquisition of Cavmont Bank Limited (“Cavmont Bank”), a subsidiary of CCHZ and subsequent merger of Cavmont Bank’s operations into ABZ. The proposed transaction, which remains subject to relevant shareholder and regulatory approvals, will position the enlarged ABZ as one of the top 10 banks in Zambia and create the momentum to advance its strategic objectives.’

Before then, it had in 2019 made a somewhat celebrated entry into Kenya. And with the market still trying to digest that, even more news followed: expect incursions into South Africa, Mozambique, Senegal, Angola and Cote d’Ivoire. Without any doubt them, the Access Bank train is still moving.

In Kenya in particular, what the Herbert Wigwe-led Access Bank did was move to acquire Kenya’s Transnational Bank, Kenya’s 36th largest bank in terms of assets, as part of a determined move to continue to cement its grand pan-African ambitions.

This came when the Central Bank of Kenya (CBK) granted leave to Access Bank at the close of October 2019 to, upon completion of the deal, take over 93.57% of the bank’s assets.

A tier-4 bank in the Eastern African nation, Transnational had posted a 58% jump in its quantum of non-performing loans to 1.85 billion Kenyan Shillings in 2018 from the Kshs. 1.17 billion it had posted in the corresponding period in 2017.

In the same 2018, Transnational Bank posted a total loss of 71.8 million Kenyan Shillings, a factor that did not deter the Red Ocean adepts at Access Bank, from seeing the brighter side potential of picking up a toehold in both the agricultural sector and East Africa’s largest economy. It is a strategy that Wigwe has used again and again: buy up a dying horse and then fix it up for good, future performance.

In his remarks on the acquisition, Herbert Wigwe, CEO of Access Bank, said that the bank was ‘pushing ahead to create Africa’s biggest retail institution and a formidable global powerhouse.’

And he was not done:

“By this time next year we would probably have added about four more subsidiaries, most of them Greenfield,” Wigwe remarked in an interview with Bloomberg. It is almost exactly one year to that day.

With operations already running in Nigeria, Sierra Leone, Gambia, Ghana, Democratic Republic of Congo and Rwanda, some of the newly planned operations were expected to open in South Africa, Angola, Mozambique, Senegal, Liberia and Ivory Coast as part of a stream of operations planned to cover some 22 African nations. Though COVID 19 would evidently have affected some of this projection, Business Hallmark could confirm the addition of Kenya and Zambia as at the time of going to press.

Also notable is the fact that under the new dispensation, while some of the new operations would be subsidiaries, others are planned to be representative offices or partnerships. This commentators say is laudable as its drive to dominate the African banking landscape is not going to be a walk in the park on account of the presence of well-heeled competitors.

But should Access even be able to ride stronger into the West and Central African field, the real icons that it would have to navigate seem to be elsewhere: the drivers from East, North and Southern Africa.

Wigwe and the strategists at Access seem to appreciate this as with its moves in Kenya and Zambia; it is first taking on the more integrated East African market, even as it is also looking at cracking the tough South African pot through a planned foray there. But there is no talk yet of North Africa which given its Arab and Middle Eastern linkages is clearly an entirely different kettle of fish.

At this point, we are reminded of what the sages say about how to eat an elephant: ‘one piece at a time.’ So we turn to the elders for counsel.

But then what are the practical challenges on the way?

As remarked by an analyst, one of the challenges that Wigwe and Access have to continue addressing is that of getting sufficient support from its home base. Given the geo-political dimensions of doing business at this level, it is apparent that the bank would require and need all of the support it can from the Nigerian authorities, at least on the policy plain.

The challenge here is that with the Nigerian authorities at the moment running a yet insular and protectionist economic regime, the first line reflex would not be to support expansionary initiatives as the Access Bank pitch for continental dominance. But then a way can be found – at least at the symbolic level – while Wigwe lives and work within the reality that he is essentially on his own.

This is more so when these developments are taking place in the season of the coming into effect of the African Continental Free Trade Agreement. Riding on the cusp of the build-up to AfCFTA, one of Kenya’s biggest banking chains, Equity Bank, had also moved last year to set up shop in Africa’s second most populous nation, Ethiopia. Access Bank’s entry into Kenya at this time may also be helped by AfCFTA.

Indeed, rather than trying to cover all of Africa geographically in one fell swoop, some market watchers think that Access Bank should be more interested in the faster growing economies of East and Central Africa.

‘The issue is more a matter of private sector assessment of potential operating and equity returns on transcontinental investments. The Nigerian border closure perhaps affects Benin Republic, Togo, Niger, Cameroon and Cote d’Ivoire more than other economies of CESA, Central, East and Southern Africa. The Nigerian firms do not need local government support, except for banks that require a certificate of “No Objection” from the CBN to invest in banks outside Nigeria,’ an analyst noted.

Indeed, this view may be right as broken down and in spite of the challenges faced on the political front; early bird drivers in the pan-African business arena like Dangote Cement and UBA have been grossing considerable returns from their African operations.

But there is a caveat, our analyst notes:

‘Now, it depends on what their focus would be. In this respect, I guess their biggest competitor would be Ecobank. Sadly, Ecobank has not quite lived up to the billing of being a truly ‘African bank’ for whatever reasons. One of which I think is the Francophone/Anglophone economic dichotomy. France has a jugular grip on all the francophone economies in Africa. So, what deliberate policies, programs and products as well as focus areas they embark on determine how far they will go in this respect.

Another option on the table may be simply be the cultivation of stronger ties with other leading banks in the eastern/ southern Africa sub-region. But how practically would this work in the shark-eat-shark world of business?

‘Verdict of the streets’

What do people think about Herbert Wigwe and his banking and business accomplishments this far?

For Olisa Egbunike, a financial analyst, he is a solid professional that like good wine has evidently matured over time. He says:

‘He is a fine and strong professional that understands the industry. He has seen the trying cycles of the banking industry. He has four or five cycles of the nation’s banking industry. He saw Paul Ogwuma; He saw Joseph Sanusi; He saw Prof. Chukwuma Soludo; He saw the other Sanusi Lamido Sanusi and Godwin Emefiele is the one there now. Therefore, he understands the dynamics of the nation’s banking industry. One of the things is I know going for him is that he understands the monetary policy very well. The reasons its some the monetary policies are not working for a very long time is because the fiscal policy of the nation has been comatose so to say. So that to a large extent affected the monetary policy because the monetary policy in combination of the CBN and CEO’s to a large extent of all these banks understand the monetary policies. They have been trying to use it for their expansion and growth. But the biggest challenge that they have is that none of them understand the effect of a pandemic depression. Just like other sectors of the economy nobody, not even their fathers have managed the economy in a pandemic. What they are doing now is a trial and error because there is no term plate anywhere on how to manage an economy in a pandemic.’

On his part, Dr. Boniface Chizea, Chief Executive Officer, BIC Consultancy services says the evidence of the bank’s continuing expansion speaks volumes about the enigma that Wigwe is:

‘I don’t know Herbert Wigwe personally but the bank he is piloting seems to be doing well. That is a fact out there. The bank is outstanding. Access Bank acquired Intercontinental Bank and Diamond Bank and is still expanding to other parts of the world. So, this is an indication that the bank is doing well.’

As for Mr. Muktar Muktar Ismail of the Association for the advancement of the rights of Nigeria Shareholders, Wigwe is the type of corporate leader that the nation needs:

‘Access Bank was a very weak bank in the early 2000’s when Aig- Imoukhuede and Herbert Wigwe took over its management. Since then the bank has grown in leaps and bounds and Wigwe has always played a significant role in growth. From about the 7 or 8 position before the banking consolidation, Access Bank has become number one in many aspects.

Wigwe has not only taken Access Bank to enviable heights, he also has created shareholder value for investors. Wigwe is not flamboyant; he is just focused and pursues whatever is good for his shareholders. In fact, it was Wigwe who saved Diamond Bank from crashing by that merger move. To tell you the truth, Wigwe is one of such persons we would support to become President of the country after he has served out his term.’


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