Why Access Bank adopts Holding Company structure – chairman
By Dele Ojo
Dr. Ajoritsedere Awosika, Chairman, Access Bank has given reasons for the institution’s adoption of Holding Company structure, saying it is a move to create strategic flexibility and diversification of the group’s revenues.
According to her, the transition to a financial Holding Company was in line with considerations such as regulatory compliance, facilitation of growth and expansion in banking across Africa, diversification into permissible financial services and risk management.
A holding company is a company that doesn’t conduct any operations, ventures, or other active tasks for itself. Instead, it exists for the purpose of owning assets. In other words, the company does not engage in the buying and selling of any products and services. Instead, it is formed so that it gains control over one or more companies.
Dr. Awosika further explained that the structure would unburden the bank from oversight functions and responsibilities of managing the subsidiaries.
She gave the dossier at the organisation’s court -ordered meeting held in Lagos, as Shareholders of the bank unanimously approved the proposed restructuring to a Holding Company (Holdco) to be known as Access Holding Plc.
Herbert Wigwe, Group Managing Director/CEO, appreciated the shareholders for their continuous support since the inception of the bank in 2002, assuring that the shareholders that the board and management would remain committed to decisions that would take the bank to the next level.
“The institution has grown beyond a lot of one of those things, even the very presence of your institution in several countries requires a different organisational structure to handle all of those things.
“If anybody tells you that there is one managing director who will oversee 20 or 30 countries, it’s a lie. We have to continuously evolve and create a structure that will ensure there is proper oversight over the subsidiaries,” Wigwe said.
President, Association for the Advancement of the Rights of Nigerian Shareholders, Dr Farouk Umar, commended the board and management for the foresight of transforming the bank to Holdco, stressing that structure would help in risk management and as well enable the company to diversify into other business opportunities to increase profitability.
President, New Dimension Shareholders Association, Patrick Ajudua, described the Holdco structure as a welcome development that would impact positively on the bank’s bottom-line and improve shareholders’ value, and commended the management for smooth running of the affairs of the bank, urging them to ensure enhanced returns on investment for stakeholders going forward.
Recently, the bank announced that its wholly owned banking subsidiary, Access Bank Mozambique S.A. completed the acquisition of African Banking Corporation (Mogambique), S.A., (“BancABC Mozambique”), a subsidiary of London Stock Exchange listed group, Atlas Mara Limited.
Access Bank Plc. is a leading full-service commercial Bank operating through a network of more than 600 branches and service outlets, spanning three continents, 12 countries and 31 million customers. The Bank employs 28,000 people in its operations in Nigeria and has subsidiaries in Sub-Saharan Africa and the United Kingdom (with a branch in Dubai, UAE) and representative offices in China, Lebanon and India.
Listed on the Nigerian Stock Exchange since 1998, the Bank serves its various markets through four business segments: Retail, Business, Commercial and Corporate. The Bank has over 900,000 shareholders (including several Nigerian and International Institutional Investors) and has enjoyed what is arguably Africa’s most successful banking growth trajectory in the last twelve years. Following its merger with Diamond Bank in March 2019, Access Bank became one of Africa’s largest retail banks by retail customer base.
Currently, the following Financial institutions operate holding company structure FBN HOLDINGS PLC,
FCMB GROUP PLC , FSDH HOLDING COMPANY, STANBIC IBTC HOLDINGS PLC, and Guaranty Trust Holding Plc, while Sterling Bank has requested the Central Bank nod to embrace the structure.
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