Global ambition seen in Access Bank’s $1bn UK goal with rights issue on tap

*Eyes being among Top 20 UK banks by 2027
*Among top 5 African banks, leading banks globally
*Targets 125m customer base
*Ambitious $1.5bn capital raising programme on

PHILLIP ISAKPA IN LONDON & ONOME AMUGE IN LAGOS

Access Bank, the  arrowhead of Access Holdings Plc, Nigeria’s largest financial institution by assets and customer size, and Africa’s largest by customer size, continued to signal its global ambition, say analysts who spoke to Business a.m. in London, the United Kingdom and Lagos,
Nigeria, following statements by a couple of its topline leaders in the wake of the HoldCo’s ongoing rights issue through which it hopes to raise at least N351 billion.

The financial services behemoth had earlier suggested that beyond meeting the new capital requirement of N500 billion set by the Central Bank of Nigeria (CBN) for banks with international licence, it had its sights set on a broader growth plan for itself when it came up with a capital raising
programme of $1.5 billion to drive an ambition many analysts say are far reaching and beyond local play.

Aigboje Aig-Imoukhuede at the signing ceremony for the rights issue spoke of the pivotal role it would play in fueling the group’s ambitious expansion plans across Africa and beyond.

Bolaji Agbede, the acting managing director and chief executive officer, Access Holdings Plc, said the rights issue is a significant step in delivering
the company’s 2023-2027 strategic plan, which many analysts say have been playing out in its African acquisitions even before 2023.
But those words reassuring shareholders and potential investors were raised up a notch by

Roosevelt Ogbonna, who leads the banking arm of the HoldCo as group managing director, Access Bank Group, during a ‘FactsBehind-the-Rights-Issue’ presentation at the Nigerian Exchange when he spoke of the lofty ambition for its United Kingdom subsidiary, Access Bank UK Limited.

In a response to shareholders’ and analysts’ questions, Ogbonna dropped this: “When Aig [referring to HoldCo chairman,Aig-Imoukhuede] is talking about a consolidation phase, the UK projection is that by 2027, Access Bank UK will be one of the top 20 banks in the UK, generating profit of about a billion dollars annually. That’s a completely different story. So, the consolidation phase will begin to pay. Now, when we have that money, of course, we’ll have to share back with our shareholders.”

According to him, the plan that has been built around elevating the subsidiary to one of the top 20 banks in the United Kingdom country by 2027 is supported by not just the projection but also by a remarkable customer base goal of 125 million customers, as the bank also seeks to position itself to
become one of the leading banks in the world.

“Our vision is to create a globally connected community and ecosystem inspired by Africa for the rest of the world. We are positioning ourselves to be one of the most respected banks globally. Our focus is on superior service across all the continents and countries we are operational in, and by 2027, we aim to be one of the top five African banks, powering trade across the continent and providing superior services to our customers,” Ogbonna further said.

Analysts suggest that the UK plan is strategic, especially with London being one of the leading financial capitals of the world, and being at par with New York in the United States, and ahead of Paris in France or Frankfurt in Germany, suggesting the UK could be a target for that global operational push.
Gregory Kronsten, an investment banker, financial markets analyst and a consultant on Africa finance and economics, told Business a.m. in London that “a fully successful issue would raise N351 billion, which would more than cover the gap between its [Access Bank’s] eligible capital of N252 billion per the CBN’s narrow definition and the new minimum capital of N500 billion for a full international licence. Access talks a bullish long game.

“It [Access Holdings] has form, having expanded at a pace to transform the four heavy hitting banks in Nigeria into the Big Five,” Kronsten added.

At the “Facts Behind the Rights Issue” at the Nigerian Exchange (NGX) office in Lagos, the financial services leaders had taken time to provide a detailed presentation on the rights issue, through which it is offering 17,772,612,811 ordinary shares at N19.75 per share as part of the capital raising programme that is expected to raise up to $1.5 billion, a figure analysts say is far beyond the CBN’s new capital requirement for the international
licence it currently operates with,hence t he suggestion about a global play in mind.

Uche Joseph Uwaleke, a professor of capital market at Nasarawa State University and president, Association of Capital Market Academics of Nigeria (ACMAN), in response to Business a.m. questions, said, “The goal of becoming one of the top 20 banks in the UK is achievable. This will require heavy
investments in technology with a serious attention to Sustainability and ESG issues. It must be recognised that the UK banking industry is highly competitive with over 300 national and international banks in operation. These include very big banks like HSBC, Lloyds Bank,NatWest, Royal Bank of Scotland, Santander UK and Barclays, many of them designated systemically important banks by the Financial Stability Board, an international
body that monitors the financial system.

“So, for Access Bank to hit USD1 billion in annual profit, it will have to work out a feasible plan to beat competitors including, as most banks in the UK have done, having a strong capital base and integrating Artificial Intelligence in its services and functions.
“For the bank, investing in innovation is a must,” Uwaleke told Business a.m.

Ogbonna, banking arm group managing director of Access Holdings, explained the journey to the United Kingdom by Access Bank when he met with shareholders and analysts last week, again signposting the fullness of the intention to play global.
“Many years ago we went to the UK. We came in a year or two years after every other bank had gone in, every new generation bank; and in that market you compete based on value. The only reason you’ll win is not who you know. Today we are the largest African bank in the UK. We are the most profitable African bank in the UK,” Ogbonna said.
“Now, the question is what does it have to do with shareholders, why is it an important conversation? All our earnings in the UK are dollarised. So it means every time there’s a devaluation our UK business continues to grow; so we’ve created a natural hedge. We did it at a time when [the] naira-dollar [rate] was less than 200 [naira]. So, we’ve invested in all our African subsidiaries and international subsidiaries today 1.2 billion in dollar terms; which on the books is being carried at N364 billion. So, any bank that says today, this is the game we want to play, they will need to spend about N1.8 trillion to be able to do what we used N300 plus billion to do,” he added.

According to him, Access Holdings’ UK and its international business has had many firsts, including the first African bank going to Malta, as well as Access UK being the first African bank in Hong Kong. Ogbonna then added, “Access US is coming.”

The journey to the $1.5 billion capital raising programme that has started with the rights issue appears to be drawing the confidence and comfort of analysts.
“Access talks a bullish long game. Surely not a huge problem to hit the N500 billion minimum capital,” Gregory Kronsten told Business a.m. in London.

Uche Uwaleke, president of Association of Capital Market Academics of Nigeria (ACMAN) agreeing with this position said:
“Access Bank is one of Nigeria’s leading banks with strong fundamentals. So, I am confident the Rights offering of circa N351 billion will be successful. I think the bank chose this path rather than a public offer in order not to dilute existing members’ control. The Rights offer route to raise capital also speaks to the level of confidence existing shareholders have in the bank.”

Aigboje Aig-Imoukhuede, Access Holdings chairman, shared a similar optimistic outlook on the future of the rights issue during the event, highlighting its pivotal role in helping Access Holdings achieve its goal of becoming one of Africa’s top five financial institutions by 2027.

Speaking confidently about the success of the rights issue, Aig-Imoukhuede stated that it would provide the necessary momentum for the company to reach its ambitious goals in the African financial sector.

Elaborating on the objectives of the rights issue, the chairman explained that the offering of 17,772,612,811 ordinary shares at N19.75 per share is the first phase of a capital raising programme designed to raise up to $1.5 billion. These funds, he explained, will be used to strengthen the company’s financial position, meet its working capital requirements, and fuel organic growth across its banking and non-banking subsidiaries.

“Since Access Bank was recapitalised in 2002, we have consistently kept all promises made to the investing public and actualised all the cyclical milestones we set out to achieve. I have unwavering confidence in the management of the group, led by Bolaji Agbede and Roosevelt Ogbonna, to see through on targets we have for the current five-year strategic cycle. As we progress towards 2027, we are committed to deliveringexceptional value to our shareholders and solidifying our position as a leading global financial institution,”Aig-Imoukhuede added.

The positive outlook for Access Holdings was further reinforced as shareholders expressed their unwavering faith in the company’s growth strategy, praising the holdco and enthusiastically endorsing its ongoing N351 billion rights issue.

Shareholders highlighted Access Holdings’ impressive history of success and consistent dividend payments, noting that these factors have strengthened their trust in the company’s leadership and fueled their optimism for the future.

Speaking on behalf  of the Pragmatic Shareholders Association of Nigeria, Bisi Bakare, the national coordinator of the association, stated: “Since Access Bank first started trading on the stock exchange at N0.65, we, shareholders have witnessed its incredible growth and accrued immense value, with the stock now trading at N19.35 as of June 9.

“Be confident that as the consolidation phase of the Group’s expansion fully takes shape and the brand’s profitability continues to increase, those of us who have been on this journey from the beginning are not about to jump off now. We fully back the capitalisation plans, starting with the Rights Issue, and are excited for the future that lies ahead for Access Holdings.”

The Access Holdings PLC rights issue, which is valued at N351 billion, was made available to shareholders and potential investors on July 8th, with a closing date of August 14th, 2024.

The company,  therefore, urged shareholders and potential investors to actively participate in the offer by taking up their rights, stressing the significant opportunities that the rights issue presents in terms of investment potential and company growth.