Access Holdings’ expansion drive boosts growth, development to Africa

 

 

Access Holdings Plc has continued to drive economic growth and development in Africa as its expansion drive and fostering local partnerships, continue to bring positive change and progress across the continent.

 

The Access Corporation has extended its operations into Angola, Botswana, Cameroon, the Democratic Republic of Congo, Gambia, Ghana, Guinea, Kenya, Mozambique, Rwanda, Sierra Leone, South Africa, Tanzania, and Zambia.

 

Its expansion drive has also led to job creation and entrepreneurship growth among others.

In a statement, the company said it strategically ventured into new territories, bringing its expertise, resources, and innovative solutions to areas with immense growth potential. Its foray into South Africa marked a significant milestone, as Access Holdings became a pioneer in extending its footprint beyond its home base.

This strategic move exemplifies the company’s vision to be a pan-African force, contributing to economic development across borders.

Through its subsidiaries, the institution has played a pivotal role in sectors ranging from finance and banking to agriculture, technology, and healthcare, bringing diverse opportunities to the communities it serves.

According to the statement:

In countries where Access Holdings has established a presence, the institution has become a driving force for job creation and entrepreneurship. Access Holdings has sown the seeds of sustainable economic development by supporting Small and Medium Scale Enterprises (SMEs), investing in local businesses, and providing financial solutions tailored to the needs of each market.

The company’s ability to adapt its business model to the unique dynamics of each African market sets it apart. Access Holdings recognises that Africa is not a monolithic entity but a collection of diverse economies with distinct challenges and opportunities. Through its expansion strategy, the institution tailors its approach to address the specific needs of each region, contributing to a more inclusive and holistic development across the continent.”

 

The diversified holdings company’s strategic expansion initiatives have positioned it as a key player in fostering progress and unlocking opportunities in previously untapped markets.

In 2022, the Access Corporation marked the final year of its previous five-year strategy which focused on building Africa’s gateway to the world through the deployment of robust risk management practices, and a flawless execution of its strategic priorities. By all key metrics, the strategy was successfully executed. Access Corporation continues to grow with over 6,000 dedicated professional staff serving over 52 million customers across 17 markets worldwide.

Restructuring to Holdco

In the second half of 2022, Access Bank was restructured into a Holding Company to realise the potential of the synergies from the various businesses, while expanding product offering to customers in payments, insurance, consumer finance and pensions

To capture all the opportunities the evolving financial landscape presents as well as diversifying earnings, the Holding Company operated as five individual verticals:

Access Banking Group, Access Pensions, Pension Fund Company, Hydrogen – Payment and Switching Services Company, Oxygen – Digital Lending Company and InsureCo – Insurance Brokerage Company. Globally and in Africa, the financial services market is undergoing a structural change, presenting a clear opportunity for Access Corporation to extend financial services to the unbanked as well as deepening its financial services offerings to banked customers.

It would be noted that Access Holdings, borne of over 20 years of Banking services, with its home in Nigeria and operations across the global landscape is on the verge of accomplishing its five year strategy, 2023-2027 of creating a globally connected community and ecosystem, inspired by Africa for the world.

Capital raising plan

Less than 24 hours after the CBN unfolded new capital requirements for banks, Access Holdings announced plans to raise $1.5billion.

 

This was just as some financial market analysts, economists and bankers welcomed the recapitalisation exercise that requires banks to beef up their capital base to N500 billion and N200 billion for commercial banks with international and national authorisation respectively.

But some analysts faulted the exclusion of retained earnings from the regulatory capital composition.

However, the CBN has stressed that alongside law enforcement agencies, it would closely monitor the exercise to prevent the influx of illicit financing into the sector.

According to the holding company, the programme aims to enhance the Group’s financial strength through the issuance of various financial instruments such as ordinary shares, preference shares, Alternative Tier 1 capital, convertible and/or non-convertible debt, bonds, or other capital and/or funding instruments.

It explained that the programme may be executed through a variety of methods including public offerings, private placements, rights issues, book building processes, or a combination thereof.

“The specifics regarding the tranches, series, proportions, dates, pricing, tenor, and other terms and conditions that may be associated, will be determined by the Board of Directors, contingent upon securing the necessary regulatory and shareholders approvals.

Financial performance

Access Holdings Plc reports strong 2023 full year financial performance. The Group recorded a robust growth in its Profits Before Tax, PBT posting a healthy N729 billion, representing 335%

Year-on-Year (YoY) increase from 2022.

 

Access Holdings’ gross earnings also surged by 87% YoY to N2.59 trillion, up from N1.38 trillion in 2022. This remarkable growth was primarily driven by a 100% increase in interest income and a 67.9% growth in non-interest income. The Group’s Net Interest Income also demonstrated strong performance, soaring by 93.5% YoY to N695.4 billion, compared to N359.6 billion in the previous year. The yield on earning assets also rose remarkably from 9.2% in 2022 to 12.8%.

Access Holdings’ Loans & Advances expanded by 60.5% YoY to N8.9 trillion, accompanied by an improvement in the Non-Performing Loan Ratio, which decreased to 2.8% from 3.2% in 2022. The Group closed the year with N2.18 trillion in shareholders’ funds, marking a significant 77.5% growth from N1.23 trillion in full year 2022.

 

Commenting on the performance, Bolaji Agbede, Acting Group Chief Executive Officer, Access Holdings Plc, said: “The Group’s strong performance in 2023 reflects our commitment to delivering value to our shareholders and stakeholders amidst challenging operating environments. The significant growth in our earnings is a testament to the resilience, strategic focus, and efficiency of our team, and reflects the diversity of our offering across banking, pension, insurance, and payments driven by robust risk management, best-in-class corporate governance, and cutting-edge technology. As we look ahead, we remain committed to driving sustainable growth, consolidating our footprint, and accelerating the attainment of our 2027 strategic objectives.”

Roosevelt Ogbonna, Managing Director/CEO, Access Bank remarked on the Bank’s accomplishments, saying: “As we reflect on the results of 2023, characterized by robust growth, strategic acquisitions, and expansion into key trade hubs, I am excited about the prospects for Access Bank. Our relentless focus on customer-centricity, digital innovation, and operational excellence has positioned us strongly to capitalise on emerging opportunities. As we enter the consolidation and efficiency phase of our Africa and international expansion strategy, we remain committed to driving sustainable growth, enhancing shareholder value, and delivering exceptional banking experiences to our customers across Africa and beyond.”

 

Access Holdings’ other subsidiaries also posted strong results, as Access Pensions Limited recorded a 75% growth in gross revenues, amounting to N12.3 billion, while Hydrogen Payment services posted an operating income of N2.1 billion and a PBT of N161 million.

Access Holdings Plc acquired Megatech Insurance Brokers Ltd. (now known as Access Insurance Brokers Ltd.) and successfully completed a US$300million capital injection into Access Banking Group, which acquired several entities including Finibanco Angola S.A., and select Standard Chartered Bank operations in Africa.

Access Bank’s UK subsidiary also opened a branch in Paris and received regulatory approval to commence operations in Hong Kong.

The Group has proposed a final dividend of N1.80 kobo per share for the 2023 financial year, bringing the total dividend payment to N2.10 kobo per share with a total value of N74.6 billion.

Reiterating his confidence in the organisation’s resilience, Aigboje Aig-Imoukhuede, Chairman, Access Holdings, said: “As we navigate this transformative period, we remain confident in the leadership of the Group to continue this upward trend and set the standard for financial service groups in the continent. Access Holdings has a rich history of excellence, and we will continue to deliver unparalleled value to our stakeholders.”

Commencing in the second half of 2024, the Group’s Africa and international expansion strategy will enter the consolidation and efficiency phase, aligning with the institution’s five-year plan to accelerate the attainment of its 2027 strategic objectives.