Access Holdings chairman bullish about raising $300m new capital

• Our shareholders have mind set on recapitalisation

• Has over 800,000 shareholders

• In 2024 Access Holdings is much older, wiser, stronger, larger 

• Is significantly respected by the capital market

PHILLIP ISAKPA IN STOCKPORT, UK

Aigboje Aig-Imoukhuede, the newly elected chairman of Access Holdings Plc, who chaired his first meeting of shareholders over the weekend, is bullish about raising $300 million in fresh capital as part of the on-going drive to meet new capitalisation threshold set by banking industry regulator, the Central Bank of Nigeria (CBN).

He spoke on the sideline of the second annual general meeting (AGM) of the multinational financial corporation, and based his confidence on what he said were the Access Holdings’ strong market position and its shareholders’ support.

The financial and investment strategist and leader in Nigeria’s business landscape has only just returned to chair the board of the institution after nearly 11 years away from Access Bank, which he led as managing director between 2002 and 2013. He and Herbert Wigwe, the late chief executive officer of Access Holdings Plc, made the bold acquisition of Access Bank in 2002 midwifing it from bottom half of Nigeria’s banking leaderboard to becoming the largest banking group in the country today.

Capital raising and mergers and acquisitions (M&A) expertise will be at play in this new round of recapitalisation that the Nigerian banking industry is expected to go through. With his involvement in many capital raising domestically and internationally, the return of Aig-Imoukhuede is expected to give fillip to the drive of Access Holdings’ team, comprising the board, executives and management, to achieve its set targets.

Analysts say local and global investor confidence would need to be galvanised in the current drive and the Access Holdings’ chairman appears already to be providing the assurances that could lead to a successful capital raising outing by the institution.

The CBN in a bold move last month released a programmed recapitalisation guideline that kicked off April 1, 2024 and is expected to terminate on March 31, 2026. It gave operators in the Nigerian banking industry exactly two years to bring their paid-up capital in line with the categorised requirements for their operating licences.

Specifically, the CBN, which had categorised the nation’s banks into three levels — international, national and regional — had followed this up in the new directive with the prescription of a new set of capital thresholds for them. It now requires international banks to maintain minimum share capital of N500 billion, while national and regional banks would need to meet minimum capital of N200 billion, and N50 billion, respectively.

But Aig-Imoukhuede’s bullishness also stems from the unanimous backing given by shareholders to the plan presented to them by the board to establish a capital raising programme targeting $1.5 billion at Friday’s AGM. This was also after a positive vote to support a rights issue for existing shareholders designed to raise N365 billion.

The financial group had explained to shareholders that  money raised through this rights issue will be channelled to supporting ongoing working capital needs, including organic growth funding for the group’s banking and other non-banking subsidiaries

According to Aig-Imoukhuede, he has the confidence that following the presentation of the rights issue capital  raising plan, the necessary shareholders’ support for Access Holdings to embark on the steps to actualisation is in place for the journey.

The Access Holdings Plc chairman also talked up what he called the unique relationship the financial group has with the capital market in Nigeria and internationally.

“It is not the first time CBN is coming up with such policy,” Aig-Imoukhuede said, adding, “Recall that in 2004 when CBN announced that all banks must recapitalise to the tune of N25 billion and Access Bank had about N3 billion of capital. Between 2004 and 2007, our team, when I was the CEO of the bank, raised two billion dollars of common equity capital.

“Therefore, in 2024 when Access Holdings is much older, wiser, stronger, larger and significantly respected by the capital market with over 800,000 shareholders, raising 300 million dollars in capital for Access Bank, its banking subsidiary, is not really much of a challenge.

“We signalled to the market first that we will be doing a Rights Issue, which means that we must carry everybody along, in spite of our large institutional shareholders.

“Nonetheless, we believe in ensuring that shareholders, either large or small, continue with us on our journey.

“They have always supported us when need be with good reasons, because they believe in the company and the performance that would be delivered subsequently to such capital raising exercise.

“What is on the mind of our shareholders now is recapitalisation and they are also concerned about how their company continues to deliver returns,” he said.

Aig-Imoukhuede said the group fully endorses the recapitalisation policy of the CBN, noting that it is a good and sensible prudential regulation.  

Banks, particularly after a period of significant devaluation of domestic currency, volatility in the foreign exchange and interest rate regime, are always encouraged to build up their capital buffer,” he said.

The Access Holdings chairman explained that this measure is to ensure that whatever adverse effect that may arise, as a result of the dynamic changes in the business environment, it would not affect their very concern.

On the future performance and expectation outlook of  the group, he said that the earning profile of the group, which is spread across Nigeria, Africa and outside Africa subsidiaries, is very robust.

“As an investor, you always look to see whether there is deep concentration where the profit is coming from; in our case, this is spread across three core areas that are of significant interest to local and international investors.

“If you look at the performance of banks in the year ended 2023 financial reports, you will see that all banks in naira terms have increased significantly their profitability as a result of the devaluation.

“But that isn’t the case with Access Bank, whose revaluation benefits come from the fact that it has significant international operations, because it is not a function of holding large foreign currency balances,” Aig-Imoukhuede explained.

For instance, he said Access Bank, United Kingdom, is the largest and probably highest performing sub-Saharan African bank that has a licence in the UK and making hundreds of millions of naira of profit from the UK.

According to him, this is not an accounting benefit that comes in the year 2023, but will continue, and with the operations of the bank in France, and across other European, Asia and Middle Eastern jurisdictions.

“We can see that the foreign currency benefit of profit in those locations are going to also accrue to the Holding [Access Holdings Plc].

“The Holding as an investor is also thinking of retail banking, which is like a utility. A retail bank with about 60 million customers is enough to sustain the bank anytime, irrespective of how volatile or uncertain the market is,” he said.

The financial behemoth recorded a 335 percent year-on-year increase in its profits before tax (PBT), reaching an impressive N729 billion for the financial year 2023, up from N167.68 billion in 2022; while it reported a remarkable 306 percent growth in profit after tax to N619.32 billion, from N152.20 billion in year 2022.

Its gross earnings of N2.59 trillion in the 2023 financial year saw Access Holdings Plc setting a new benchmark in the Nigerian banking industry. The amount is 87 percent year-on-year higher than the N1.38 trillion gross earnings the financial powerhouse reported for 2022.

As a reflection of its outstanding financial performance, Access Holdings Plc paid a final dividend of N1.80 kobo per share for the 2023 financial year, amounting to a total dividend payment of N2.10 kobo per share, with a total value of N74.6 billion.