Access Bank’s deal in Zambia consolidates its foothold in 13 African countries
Access Bank’s pan African dream is coming to fruition following another successful deal in Zambia. Just last week, Access Bank announced the execution of definitive agreement with Cavmont Capital Holdings resulting in the merger of Cavmont Bank with Access Bank Zambia. The merger with one of Zambia’s top banks when ranked by retail and commercial banking strengths, is to make Access Bank Zambia among the top ten banks in that country.
After its clinical acquisition of the defunct Diamond Bank, which transformed the bank into one of the biggest banks in the country by assets, Access Bank embarked on purposefully driven expansion across the African continent. In October 2019, it completed the acquisition of Transnational Bank Plc in Kenya, east African biggest economy.
By year end 2019, Access Bank had subsidiaries in United Kingdom, Rwanda, Ghana, Congo, Gambia, Sierra Leone, Guinea while subsidiaries in Cameroon, Mozambique are to commence operations in 2020. It also has representative offices in China, Lebanon, India and the United Arabs Emirates (UAE).
In FY2019, its subsidiary in the United Kingdom with three branches and 139 employees, made N30.7 billion as operating income and a profit before tax of N20.5 billion. The total assets for the period stood at N899.76 billion, while loans and advances, and total deposits were N557.2 billion and N769.8 billion respectively.
Access Bank Ghana has fifty-two branches and 546 employees. In FY 2019, it generated N27.3 billion as operating income and N14.8 billion as profit before tax. Total assets amounted to N297.8 billion; loans and advances, N75 billion while total deposits stood at N202.8 billion. The UK and Ghana subsidiaries accounted for 94 percent of its subsidiaries’ profit before tax with a return on equity of 15 percent and 23 percent respectively in FY 2019.
Announcing the deal last week, Herbert Wigwe, Access Bank’s group managing director, said the bank made the move to create the momentum that would advance its strategic objectives.
“Access Bank is focused on building the scale needed to become a leading bank in its key operating markets through leveraging the right partnerships. This transaction underscores our approach and is another stepping stone towards delivering on our strategic aspirations of becoming the World’s Most Respected African Bank and Africa’s Gateway to the world. It will strengthen our presence in Zambia, while furthering our footprint for growth in the COMESA region, Africa’s largest free trade area.
“ Over the years, we have worked hard to build a sustainable international bank of African origin that can expand the potential of businesses, support economic prosperity, facilitate trade and investment and extend the power of banking to millions of people who do not yet have the financial tools to achieve their dreams. The proposed transaction aligns with that strategy”, Wigwe said.
Peet van der Walt, MD, Cavmont Bank commented that the deal would benefit and offer greater security to the bank’s customers.
“Cavmont bank’s vision is to be a world-class bank, rated amongst the best in Zambia. Our customers will benefit from the greater security offered by one of the most capitalised banks in the country, increased scale in Zambia, access to a broader digital and retail offering, and a geographic network across the continent. We look forward to working closely with Access Bank to deliver the benefits of the merger to all the stakeholders”, Peet van der Walt said.
On July 29, 2020, the board of Access Bank considered and approved its audited half year 2020 financial statements and the payment of an interim dividend for the period ended June 30, 2020, all subject to the approval of the Central Bank of Nigeria (CBN). Access Bank, in the last few years, has consistently paid N0.25 per share as interim dividend to shareholders. Its share price gained by 2.36 percent last week Friday to close at N6.50 per share.