• Friday, December 08, 2023
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Herbert Wigwe’s relentless pursuit for Access Bank growth gains recognition

Technology will play a role in risk management, sustainability — Chairman, Access Bank

“Herbert Wigwe, group managing director of Access Bank Plc, is one of the most respected bankers on the continent, without a shadow of a doubt”.

This was the comment made by Omar Ben Yedder Group Publisher of African Banker and Chair of the Awards Committee after Wigwe was declared the ‘African Banker of the Year’ at the 2021 edition of the African Banker Awards held recently.

On June 23, 2021, Wigwe was adjudged the winner of the African Banker of the year award for the second consecutive time, by the African Banker Magazine.

He was recognised for his aggressive expansion of the Access Bank brand in the continent. As Access Bank continues to successfully execute its 5-year corporate strategy (2017-2022), Ope Ani and Guy Czartoryski of Coronation Research, see the long-term investment case for the company strengthening.

“We expect the stock to continue to outperform on underlying improve[1]ment in profitability in the medium term. We rate the stock a BUY, with a price target of N12.88,” they said in a recent report on Nigerian banks.

The company is on track to ‘Win with Africa’, exploiting significant digital and retail banking opportunities, supported by Nigeria and Africa’s demographics. Elsewhere, we like management’s dynamic view on the future of banking, as it makes a foray into the payments space.

According to the report, the bank sees non-interest income as a significant and rapidly-growing source of revenue over the long term. The bank earns substantial revenue from fees and commission income, and trading income, due to its strong treasury function. On the former, digital transactions are the primary driver. They grew at a Compound annual growth rate (CAGR) of 113.2 percent from FY17-20 and accounted for 10.7 percent of total revenue in FY20 (FY17: 3.1%).

Read also: Unity Bank unveils new code on USSD platform to combat e-banking fraud

Also according to management, a third of all transactions in Nigeria start from or end at Access and ensuring retail transaction flows continue to grow is the bank’s core focus.

However, the report noted that Access Bank continues to ‘nurture’ the loan book inherited from Diamond Bank from the 2019 business combination and has written off N197.68 billion in loans over the last two years, even as it continues to pursue recalcitrant debtors in the country.

Wigwe controls the largest retail bank in Africa with over 40 million customers. The bank’s entry into African markets was recognised by the panel of judges at the African Banker Magazine.

Responding to the award via zoom, Wigwe was pleased with the award, saying it was supported by the bank’s strong team.

He said the bank is focused on promoting corporate discipline, adding that the bank wants to be in key markets in the continent, building payment gateway and providing trade finance support.

“We want to be seen as the best bank supporting the African Continental Free Trade Area agreement (AfCFTA). In terms of the Diaspora remittances market, we need to be there. We are present in key areas in the continent,” he said.

Understandably, Wigwe is also positioning the bank to take advantage of the opportunities which the AfCFTA presents in the continent. The AfCFTA agreement is expected to create the largest free trade area in the world measured by the number of countries participating.

The pact connects 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at $3.4 trillion. It has the potential to lift 30 million people out of extreme poverty, but achieving its full potential will depend on putting in place significant policy reforms and trade facilitation measures.

It is expected that full implementation of AfCFTA would reshape markets and economies across the region and boost output in the services, manufacturing and natural resources sectors.

Wigwe’s recent visit to the President of Rwanda, Paul Kagame, was part of the bank’s continental expansion drive.

The bank’s chief said across Africa, there was an opportunity for the bank to expand to high-potential markets, leveraging the benefits of AfCFTA. He further said AfCFTA, among other benefits, would expand intra-Africa trade and provides real opportunities for Africa.

He believes that Africa has enormous potential and there are opportunities for an African bank that is well run, that understands compliance and has the capacity to support trade and the right technology infrastructure to support payments and remittances, without taking incremental risks.

“We believe that we are best positioned to basically do all of that. Our focus is to become an aggregator in Africa and we are building a global payment gateway and providing trade finance support and correspondent banking across the continent. We are focusing on the key markets,” he said.

The bank under the leadership of Wigwe, recently embarked on strategic expansion to other African countries in fulfilment of its aspirations of becoming Africa’s Gateway to the World, and in line with its vision to be the World’s Most Respected African Bank.

Responding to questions on Access bank women empowerment initiative, Wigwe noted that the programme has run for eight years and has been extremely successful.

The Access bank Gender Empowerment (GEM) is a program aimed at supporting women and aspiring female entrepreneurs. Under this program, Access Bank provides women with resources they need to grow their business. It encompasses Finance, Capacity building, Networking, Advisory services and Market collaborations.

Wigwe noted that in 2006 when the programme started, the bank partnered with the International Finance Corporation (IFC), the private sector arm of the World Bank Group, to provide a $15 million loan to the bank to extend lines of credit to women entrepreneurs.

He said today, the bank has about 5 million to 6 million women on that platform and has taken the initiative to other parts of the continent.

“We are neck-deep in gender-related issues far beyond any other institution. The idea is if you build, support or train a woman, you train the whole family,” he said.

“For us at Access Bank, supporting and empowering women is truly at the heart of our strategy and other things we have to do as far as sustainability is concerned.

“In the last couple of years, we have made significant progress as a bank and there have been several things that have been done in terms of supporting women.

“The ‘W’ initiative is supposed to inspire and empower women as well as female entrepreneurs. When we started doing it, some people thought it was a joke.”

“Through our W session- in-branch and W Business Hubs, we provide you a platform to meet with industry experts on how to come up with a compelling business plan,” he said.

Access Bank Plc reported its full-year 2020 (FY2020) numbers recently with a 14.7 percent Year-On-Year (YoY) growth in gross earnings at N764.7 billion.

The robust growth in gross earnings was principally driven by an 85.6 percent YoY spurt in net gains on financial instrument held at fair value and reduced FX losses, offset by a decline in other operating income (by 20.3%) and a 23.7 percent drop in interest income on financial assets at Fair Value through Profit or Loss (FVPL).

Access Bank’s Profit Before Tax (PBT) grew by 13 per cent to N125.9 billion from N111.9 billion, despite the high cost of operating the enlarged franchise and the increase in net impairment charge of near N43 billion arising principally from a Structured Trade Finance(STF) portfolio in the Access Bank UK.

The Bank’s Profit After Tax (PAT) rose by same margin from N94.1 billion to N106 billion in 2020 on the back of a 32 per cent growth in operating income, which offsets the rise in impairment charges and operating expenses.