Nigeria’s largest bank by assets value Access Bank Plc has completed the acquisition of a 78.15-percent stake in African Banking Corporation of Botswana Limited (BancABC Botswana).
A statement issued by the Herbert Wigwe-led group from its Victoria Island office in Lagos, Nigeria, announced the conclusion of the deal after reaching an agreement with Atlas Mara, a financial services group formed to undertake the acquisition of target banks in Africa.
BancABC Botswana is a well-capitalized franchise with impressive growth prospects in Southern Africa. The bank competes in the local market as the fifth-largest bank in Botswana, owing to its achievements over time in the retail banking space.
Prior to acquiring the stake in the Botswana-based bank, Access Bank in April signed a definitive agreement with Atlas Mara to acquire the majority issued share capital of BancABC Botswana in the second half of 2021.
The conclusion of the deal will set the Nigerian lender on course to expand its African presence to 12 countries. This is expected to strengthen earnings power through revenue diversification and ensure growth in its core corporate and SME banking operations.
Wigwe, the general managing director and CEO of Access Bank, said the successful conclusion of the transaction will provide significant synergies by combining BancABC Botswana’s strong retail banking operation with Access Bank’s wholesale banking capabilities.
“The combination is another step towards our broader vision of becoming the world’s most respected African bank,” Wigwe said.
With the recent acquisitions and strategic investments that the group has made so far to expand operating capabilities in key trade corridors connecting Africa to the rest of the world, investors have raised concerns over the recent surge in the company’s liabilities and debt profile.
According to figures contained in Access Bank’s audited half-year statement, its liabilities so far in 2021 have increased from N7.93 trillion ($19.30 billion) in January to N9.28 trillion ($22.59 billion) as of June 30.
Meanwhile, its interest-bearing borrowings have increased from N791.46 billion ($1.93 billion) to N842.54 billion ($2.05 billion). Recently, it added to its interest-bearing borrowings following the successful pricing of a $500-million tier-1 Eurobond*.
In a move to create increased value for shareholders and cut back on operating expenses and other costs arising from its recent acquisitions, Access Bank disclosed that the group received an approval-in-principle from the Central Bank of Nigeria to restructure its business into a holding company structure.
The structure will enable the bank to accelerate its objectives around business diversification, improved operational efficiencies to reduce costs and improve the quality of earnings, talent retention and robust governance.
As of press time, Oct. 12, shares in the bank were trading at a price of N9.70 ($0.02361), 2.65-percent higher than its opening price of N9.45 ($0.02301) per share this morning.
*Eurobond is a fixed-income debt instrument (security) issued by an entity (government or corporate) and denominated in a different currency than the local one of the country where the bond has been issued.