Access Bank: Promoting global brand through mergers and acquisitions in international markets
By Dele Ojo
“Before I go further, let me share some thoughts on why mergers and acquisitions should be taken seriously as an instrument for enhancing banking efficiency, size, and developmental roles. All over the world and given the internationalization of finance, size has become an important ingredient for success in the globalizing world. In the world of finance, no country can afford to operate in isolation. The last few years have witnessed the creation of the world’s banking group through mergers and acquisitions. The trend has been influenced by factors such as prospects of cost-savings due to economies of scale as well as more efficient allocation of resources; enhanced efficiency in resource allocation; and risk reduction arising from improved management. Mergers and acquisitions especially in the banking industry is now a global phenomenon.”
–Professor Charles Chukwuma Soludo, Central Bank of Nigeria’s Governor, July 2004, at the verge of the banking consolidation exercise embarked upon by the CBN.
Over the past three decades, Access Bank Plc. has evolved from an obscure Nigerian Bank into a world-class African financial institution. Currently, the Bank 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.
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 Intercontinental bank in 2012.
As part of its continued growth strategy, Access Bank is focused on mainstreaming sustainable business practices into its operations. The Bank strives to deliver sustainable economic growth that is profitable, environmentally responsible, and socially relevant.
In March 2002, the Board of Directors appointed AigbojeAig-Imoukhuede as Managing Director/Chief Executive Officer and Herbert Wigwe as Deputy Managing Director. The mandate was clear: Reposition the bank as one of Nigeria’s leading financial institutions within a five year period (March 2002 to March 2007). This task was perceived by many as impossible given the realities of the Bank at the time.
Currently the bank operates through a network of about 366 branches across major cities and commercial centres in Nigeria, Gambia, Sierra Leone, Zambia, Rwanda and Democratic Republic of Congo, and of late in Botswana. It is a full service commercial bank operating through a network of more than 600 branches and service outlets, spanning three continents, 12 countries and 36 million customers. The Bank employs 28,000 thousand people in its operations in Nigeria, Sub Saharan Africa and the United Kingdom, with representative offices in China, Lebanon, India and the UAE. It continues to look at opportunities to build its network in global trade and payment centres, helping Africa to play its part on the world stage.
How was this possible? Most of the expansionary vision of the financial institution was premised on the merger and acquisition template as the bank grew by way of acquisition and mergers of existing organisations that fit into its corporate objectives and vision.
Domestically, the bank expanded its network by acquiring hitherto Intercontinental Bank, and Diamond Bank respectively to consolidate its hold on commercial and retail banking, after the regulatory banking auditing exercise in 2009.
On the global scale however, the bank has continued to expand its services beyond Nigerian frontier as it has acquired or merged with various banking institutions in Sub-Sahara region.
For instance this month it announced the acquisition of 78.15 per cent shareholding in African Banking Corporation of Botswana Limited (BancABC Botswana).
BancABC Botswana is the fifth largest bank in Botswana and is a well-capitalized franchise poised for growth in its local market.
In a statement to the Nigerian Exchange Limited, Sunday Ekwochi, the bank’s company secretary, explained that the new acquisition would form part of the Bank’s nexus for trade and payments in Southern Africa and the broader COMESA trade region.
To him, BancABC Botswana’s achievements in the retail banking space would provide an opportunity for Access Bank to deploy its best-in-class digital platforms and product suites to the benefit of BancABC Botswana’s customers and enable it to compete strongly across its core business segments.
Commenting on the transaction, Dr. Herbert Wigwe, GMD/CEO of the Bank said, “We are pleased with the successful conclusion of this transaction which will provide significant synergies by combining BancABC Botswana’s strong retail banking operation with Access Bank’s wholesale banking capabilities. It will also strengthen the quality of earnings through revenue diversification and growth in the corporate and SME banking segments for BancABC Botswana. The combination is another step towards our broader vision of becoming the World’s Most Respected African Bank.”
Commenting on the transaction, BancABC Botswana Managing Director Mr. Kgotso Bannalotlhe, said: “We are delighted to have Access Bank on board as a shareholder and strategic partner as we continue to execute on our medium-term growth objectives. This transaction represents an opportunity for BancABC Botswana to be part of one of the largest banking groups in Africa and benefit from Access Bank’s strong corporate banking franchise, digital banking capabilities, and innovative product offering, as well as trade finance and international banking that leverage Access Bank’s footprint across Southern Africa and the SSA region more broadly.
“I want to assure our clients that the safety of their accounts, the stability of banking operations, and high-quality customer service will remain our top priorities during the transition. We are grateful for the trust of our customers, who can look forward to new products and services as the bank pursues sustainable growth. Our mission, to serve and support our customers during this challenging time and continue to contribute much more meaningfully to economic development of the country, will benefit greatly from this transaction.”
BancABC Botswana is retail focused commercial banking institution listed on the Botswana Stock Exchange. It commenced operational as a commercial bank in 2009 and has since grown to become a top 5 bank in Botswana. The bank offers various products and services to over 60,000 customers including personal banking, business and wholesale banking through its network of eight branches and 13 ATM’s in five cities across the country
Prior to the acquisition of BancABC Botswana, and following the completion of all regulatory procedures, Grobank Limited was officially renamed Access Bank South Africa Limited. The deal was consummated after Access Bank’s acquisition of controlling shares in the former Grobank Limited, South Africa.
With this development, Access Bank South Africa Limited was positioned to deliver a robust banking operation that connects key African markets.
At an official closing ceremony in Sandton, top executives of the two banks were upbeat about new opportunities for clients, noting that the Bank would continue to support all its stakeholders, while opening doors to growth opportunities both in the short and long term.
Bennie van Rooy, CEO of Grobank 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.”
Herbert Wigwe, CEO of Access Bank Plc, said,” today’s ceremony in South Africa seals our commitment to delivering our strategic aspirations of becoming Africa’s Gateway to the World, in line with our 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.”
In its 2021 Top Global 1,000 Banks ranking, Access Bank ranked 630th in the world and fourth in Nigeria, as against the 508th in year 2020, and fifth in Nigeria.
“ Access Bank’s Tier 1 capital suffered a steeper fall of 18.1% for the year, putting it just behind Guaranty in the country rankings, and in 630th place in the overall Top 1000, compared with 508th spot last year. But Access remains the country’s largest lender by total assets, thanks in no small part to a series of acquisitions across the continent. After merging with local rival Diamond Bank and acquiring Kenya’s Transnational in 2019, Access announced the acquisition of Zambia’s Cavmont in 2020, and also acquired Mozambique’s African Banking Corporation earlier in 2021.
Access comes in in fourth position in 2021’s performance rankings, compared with fifth position last year. The bank topped the country for asset quality — its non-performing loan ratio dropping from 5.7% to 4.3% for the year — but ranked lowest in the country’s top five for soundness,” The Banker magazine expressed.
By 2013 Access Bank became AA- rated by S&P and was able to raise capital in the global bond markets, with its first successful US$350m Eurobond issuance that took place in July 2012. Access Bank vowed to become the world’s most successful African Bank and embarked upon a new five year strategy focused on financial inclusion, women and youth as well as global trade finance, treasury and payments for the corporate sector. Its sights were by now firmly set on becoming a top three bank in all the markets in which it operated.
The Bank continued to build out its operations across the continent and in global trade hubs, determined to capture Africa’s trade flows with the rest of the world and within the continent. In 2017 Access Bank set out its next five year strategy, focused creating a global payments infrastructure which would enable it to become Africa’s gateway to the world.
Building a strong retail bank which was digitally-led and Omni-channel was a key pillar for Access Bank’s ambitious growth strategy, along with consolidating its strengths in corporate banking. In 2018 it saw the opportunity to accelerate its five-year plan with the merger of Diamond Bank, Nigerian’s leading retail bank with 19 million customers, including 10 million mobile customers, and a strong reputation for data analytics and technological innovation.
Access Bank is the largest bank in Nigeria and Africa’s leading bank by customer base. It is a full service commercial bank operating through a network of more than 600 branches and service outlets, spanning three continents, 12 countries and 36 million customers. The Bank employs 28,000 thousand people in its operations in Nigeria, Sub Saharan Africa and the United Kingdom, with representative offices in China, Lebanon, India and the UAE. It continues to look at opportunities to build its network in global trade and payment centres, helping Africa to play its part on the world stage.
At the Bank’s 2020 Annual General Meeting, Herbert Wigwe, CEO of Access Bank Plc told shareholders “Our geographical diversity is a key element of our business model providing opportunities for growth in different economies, and enhancing resilience. We have acquired exceptional capacity to successfully execute mergers and acquisitions with speed and efficiency at minimal risk while delivering value to shareholders. The series of mergers and acquisition we have undertaken since 2005 all bear testimony to this and have all been value accretive”.
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