…Receives CBN nod to adopt HoldCo structure
Access Bank has announced definitive agreements to bolster its position in Mozambique, as well as to enter the South African market.
This follows the recent transaction with Cavmont Bank in Zambia and further embeds the Bank’s presence in the SADC region, one of Africa’s most important trading blocs.
Besides, the bank also announced that it has received the Central Bank of Nigeria (CBN’s) Approval-in-Principle to remodel its business operations into a holding company (HoldCo) structure.
In a statement posted on the Nigerian Stock Exchange (NSE) website, and signed by its Company Secretary, Sunday Ekwuochi, the bank said these transactions will result in a more connected African banking network that builds on the bank’s existing foundation and enhances its value proposition to stakeholders, including customers and employees.
“This transaction will be funded from the capital invested by the Bank in Access Bank Mozambique and will result in the Access Bank Mozambique becoming the 7th largest bank in the country, up from 20th.
“As an enlarged business, Access Bank Mozambique will have an enhanced capacity to play a more impactful role in the growth of the Mozambican economy, particularly in the emerging oil and gas sector, an industry that Access Bank has deep experience in.”
The bank said the first is an initial cash consideration for a 49 per cent shareholding, increasing to a majority stake in the second tranche. Both tranches are subject to various regulatory approvals and the overall transaction subject to Grobank’s shareholder approvals.
It explained that GroCapital, whose shareholders include the Public Investment Corporation, Africa’s largest investment manager, and Fairfax Africa Holdings, a leading global investor, would retain an existing but diluted shareholding in Grobank.
“A presence in South Africa will serve as a cornerstone for further momentum in delivering on Access Bank’s mission to be Africa’s Gateway to the World.
“The proposed transaction is expected to provide access to the largest banking market in Africa, and enable Access Bank to consolidate its Southern African and broader African footprint with enhanced capabilities to fulfill the needs of multinational clients.”
It further explained that the transaction is subject to regulatory approvals and customary conditions precedent.
On the Holdco structure, the bank said the restructuring would enable it to further accelerate its objectives around business diversification, improved operational efficiencies, talent retention as well as robust governance.
However, Access Bank stated that further details regarding the proposed HoldCo structure would be communicated to the market in due course.
“Shareholders will benefit from the economies of scale of a larger banking network, including the associated cost efficiencies arising from the bank’s federated IT system and replication of investments in innovative products across a wider range of markets.
“A broader and connected Africa network remains a core strategic focus for geographic earnings growth and diversification, which will further enhance profitability and risk metrics.
“Through these transactions, Access Bank will be well placed to promote regional trade finance and other cross-border banking services, further leveraging its presence in key global trade corridors in the UAE, the UK, China, Lebanon, and India.
Speaking on these developments, the Group Managing Director, Access Bank, Herbert Wigwe, said: “We have consistently said that we are focused on building the scale needed to become a leading African bank; one that leverages our experienced and growing talent base and key stakeholder partnerships towards driving sustainable impact and profitability.
“Today’s announcement demonstrates further 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.”
“These transactions will significantly strengthen our presence in Southern Africa and further our footprint for growth in the SADC region. With a broader presence across the continent, Access Bank will be better placed to support our customers who are increasingly looking towards intra Africa growth.
“The proposed transactions will accelerate the Bank’s momentum towards delivering world-class banking services to an expanded customer base across Africa. Our goal remains to reach and impact 100 million unique customers across the continent,” he said.