• Friday, March 29, 2024
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Access Bank to issue Eurobond this week

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

Nigeria’s biggest lender, Access Bank has announced that it will be issuing a dollar-denominated bond this week.

While Access Bank is yet to reveal the size of the bond as it told investors it will likely be determined by demand, market analysts said the tier-one lender will likely issue about $400 million, largely to offset its maturing bond next month.

The Eurobond offer is expected to be open for one week and will commence from September 15 2021, according to BusinessDay findings.
With presence in 11 African countries, Access Bank with a B2- rating by Moody’s and B (stable) by Fitch has a $400 million running Eurobond with a coupon of 9.25 percent due in October 2021.

“The transaction is expected to be priced at about 9-9.5 percent,” Ayorinde Akinloye, investment research analyst at United Capital, said.

The projected interest which is likely to come at a premium, considering the current average 5 percent of the FG bond, is on the back of the fact that the bond is going to be a perpetual one and would have an option for Access to recall it, Akinloye said.

Meanwhile, Access Bank’s Eurobond announcement is coming ahead of Nigeria’s planned Eurobond issuance in October.

In a notice to the Nigerian Exchange (NGX) Limited on Thursday, the lender said it has mandated some firms to make arrangements for the Eurobond sale.

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Both local and international issuing firms will work with the lender in raising the foreign debt. Absa, Barclays, JP Morgan and Standard Chartered Bank will serve as joint bookrunners while Chapel Hill Denham and Rand Merchant Bank will serve as financial advisers.

Recall that Access Bank recently launched an African expansion strategy to accomplish its vision to be the World’s Most Respected African Bank.
The tier-one lender recorded its highest half-year profit in nine years in the second quarter of 2021 on the back of increased interest income fueled by the growth in corporate and retail value chains.

Its profit grew by 42.45 percent to N86.94 billion in the financial period ended June 2021 from N61.03 billion in the comparable period of 2020.

Access Bank’s retail banking business continued to grow with a 24percent year-on-year increase in gross earnings to N118.6billion (H1 2020: N95.8billion), driven by a 58.52 percent year-on-year increase in Interest Income and 37percent year-on-year growth in revenue from other channels and digital businesses.

This feat was achieved through Access Bank’s unique business model that supports the corporate and retail value chains throughout the African continent and beyond.

With improving profitability, resilient capital position and a robust, diversified balance sheet, the Group said it’s on track to deliver on its vision to be the World’s Most Respected African Bank.
Despite the inflationary environment and increased regulatory costs, the bank’s Cost-to-Income Ratio stood at 60.1percent, a 570-basis point reduction from 65.8percent in H1 2020.

During the period, the bank recorded progress in its financial inclusion objective to bank 1 in every 2 Nigerians. It added 2,371,832 new customers as well as 16,428 new agents, creating more employment and providing convenience to customers.

These strides in the bank’s retail business resulted in growth in savings deposits to N1.4trillion, a 4percent growth from N1.3trillion in December 2020, and a Cost of Funds reduction to 2.9percent (H1 2020: 3.7percent).