There are elements in the method of the Herbert Wigwe, the group managing director of Access Bank Plc., that gamers of Pac-Mac, the iconic video game.
Pac-Man is a simple game about one of our basic needs in life: sating our appetite.
The goal of the game is to eat all 240 dots in a maze without running into one of the colourful ghosts in the game. Herbert Wigwe also has a huge appetite. This time, it is not for dots, but for pieces of a continental financial services puzzle.
For those old enough to remember the banker grandees of times past in their prime – Gamaliel Onosode, Subomi Balogun, Oladele Olashore, and Sam Asabia – it is difficult not to see Herbert Wigwe, the group managing director of Access Bank Plc., in that mold. Like those titans, he is out to remake the entire sector.
He ticks all the boxes. Grace under pressure, yes. Ambition moderated by patience, yes. Passionate but inscrutable. Inspirational yet suffers no fools gladly, yes. Strategy smarts, yes. Operational ambidexterity, yes. Perfectly turned out at all times, yes.
Oyin Jolayemi Street to the World
Twenty years ago, he was just one of many other ambitious bankers in their thirties who operated from Oyin Jolayemi Street, in Victoria Island, the then nerve centre of what was then called new-generation Nigerian banking.
Somewhere along the line, together with his Siamese twin, Aigboje Aig-Imoukhuede, he took what the corporate history page on Access Bank’s website describes as “an obscure Nigerian bank” – one out of 89 at the time – and made it one of the top 5 most recognizable brands across all categories in Nigeria today.
How Project Festival, the codename for a plan launched in the sitting room of Aig’s home on Festival Road, Victoria Island, to purchase a bank at the dawn of the millennium mutated in the space of 20 years to become a strong first choice for Africa’s financial services gateway to the world is nothing short of a miracle.
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A stock-taking shows that Access Bank currently operates more than 600 branches and service outlets, 3,000 ATMs, and 49,000 points-of-sale. It also has over 28,000 employees, and 58,000 agents spread across three continents, and 12 countries.
In terms of customer numbers, at 40 million customers it is now the largest bank in Africa leaving the other continental giants, Standard Bank, ABSA, First Rand, and National Bank of Egypt trailing behind. Of this number, 9.8 million are digital banking users.
Stay hungry, stay foolish
All Wigwe’s peers have since left the scene: pushed out, burned out, expired, or hit the ceiling of the Central Bank of Nigeria’s limit on bank CEO tenures.
Wigwe is the last man standing. But he is not done yet. If you ask him, he’ll probably tell you that he is not standing still.
Long before Steve Jobs gave his now famous commencement speech at Stanford University in 2005, Wigwe had modeled his career on an insatiable craving to reach the top and boundless curiosity. WigwHe has never settled.
Scale is the name of the game
Lately, he has been in the news a lot lately. Over the last two years, Access Bank has been on a deal-making tear, chewing up banks across the continent.
Having gained solid integration experience from the local acquisitions of Marina Bank and Capital Bank in 2005, Intercontinental Bank in 2012, and Diamond Bank in 2019 he has elevated his M&A playbook from draughts to chess.
To cite one example of Access Bank’s integration excellence, at the time of the merger with Diamond Bank, it was projected that merger synergies of N153.9 billion would be achieved over three years (2019 -2022). Only two years in, the combined bank has chalked up N133.4 billion, approximately 87 per cent of that target, in synergies.
Powering off from that in 2020, he sewed up two important deals: Grobank in South Africa and Transnational Bank in Kenya in 2020.
So far this year, he has completed the acquisitions of BancABC in Mozambique and Botswana, and Cavmont Bank in Namibia. Winning the race to vacuum up Atlas Mara’s assets in east and southern Africa places Access Bank in a vantage position to buy a majority holding in Union Bank if and when it comes up for sale. Atlas Mara, the London-based pan-African banking group started by Bob Diamond, former CEO of Barclays, owns 49.97 per cent of the 104-year-old bank.
It would not be overly imaginative to consider deals so far with Atlas Mara as the club membership dues Access Bank paid to be first-in-line when the precious equity in Union Bank comes up for sale.
Shortly after inking the deal to acquire BancABC, he revealed the thinking behind the bank’s deal frenzy.
“We are building the scale necessary to compete effectively and efficiently in key African markets outside Nigeria and ensure we sustainably deliver a strong return on invested capital in our Africa expansion. Scale is an important contributor to returns, and this transaction is consistent with our rigorous efforts to create a strong presence with scale across Africa, and in line with our vision to be World’s Most Respected African Bank.”
Not done putting together the pieces of Access Bank’s geographic jigsaw puzzle, Wigwe is sniffing around for more deals.
Other countries on the prospecting list include Algeria, Angola, Cameroun, Côte d’Ivoire, Ethiopia, Guinea-Conakry, Egypt, and Senegal.
Eyes always on the ball
It would be unfair to pigeonhole Wigwe as a deal-obsessed executive. What he is clearly doing is buying discounted options on the future success of the African Continental Free Trade Area. AfCFTA is going to open up exciting new opportunities in financial services.
He wants Access Bank to get in on the ground floor before valuations go sky high. He is also positioning the bank to fully exploit its market-leading digital and retail banking competencies on a continental scale, as well as the demographic opportunities available there. It is also important to remember that for any deal that Access Bank closes, the board probably rejected at least 5 others that missed its criteria or were overpriced.
Like all great CEOs, Herbert Wigwe recognizes that while large-canvas thinking is great, real success comes from the ability to deliver a competitive return on capital to shareholders year-by-year, and quarter-by-quarter.
To say that 2020 was annus horribilis is an understatement. COVID and the fall in oil prices saw Nigeria slip into a recession in the fourth quarter. Banks felt the pain in their asset quality, profitably, pressure on IT infrastructure, capital and liquidity. Despite the torrid conditions, Access Bank still gave a good account of itself to shareholders.
A review of the bank’s full year performance in 2020 shows that gross earnings grew by 15 per cent to N764.7 billion compared to N666.8 billion in 2019. Mainly as a result of significant growth in net trading income, the bank’s operating income climbed 32 per cent to N515.3 billion from N389.3 billion in the financial year ended 2019.
On the fees and commissions side, Access Bank saw an increase of 27 per cent to about N116 billion, largely from increased transaction velocity across retail channels and other electronic business, which grew 151% compared to 2019.
In 2020, the bank recorded a commendable improvement in its deposit mix supported by low-cost deposit mobilization from current and savings accounts. Customer deposits closed the year at N5.59 trillion, a clear 31 per cent growth from N4.26 trillion at the end of 2019.
Net loans and advances rose 15 per cent to stand at N3.76 trillion as of December 2020, up from N3.26 trillion in December 2019. In contrast, non-performing loans (NPL) ratio dropped to 4.3 per cent compared to 5.8 per cent in the previous financial year.
Proof of its buffer padding was also seen in its capital adequacy ratio of 20.6 per cent on an adjusted basis based on regulatory transition arrangements, as against 15 per cent for Systemically Important Banks (SIBs).
“Nigerian Banks: Resilience built in,” a June equity research note by Coronation Research placed a BUY recommendation on the stock Access Bank and a target price (TP) of N12.88. It closed trading on Friday, August 20 at N9.00.
Shareholders have no cause to complain. Access Bank is in safe hands.
