Nigeria’s biggest lender, Access Bank is seeking more acquisitions in its pan African expansion drive days after snapping up some African assets of Standard Chartered Plc (STAN).
Access Bank Plc last week announced the purchase of the British giant’s entire operations in Angola, Cameroon, Gambia and Sierra Leone — countries where it’s already present.
The Bank is also taking over StanChart’s consumer, private and business banking division in Tanzania, widening its footprint to at least 17 markets.
The parties didn’t disclose a value for the deals.
Chief Executive Officer of Access bank, Roosevelt Ogbonna said in an interview in London that Access will continue its strategy to “build a railroad across the continent to support trade and payments.
“We’ll be going into a market, maybe as a greenfield, understand it better and then consolidate” through deals.”
The lender remains largely absent in French-speaking African countries and will look to follow its expansion strategy in those markets as soon as opportunities present themselves, Ogbonna said. It announced the opening of an office in Paris in May.
As for StanChart, the disposals partly fulfill a plan unveiled last year to exit seven countries in Africa and the Middle East as part of a broader effort to focus on the region’s largest and fastest growing markets including Saudi Arabia and Egypt.
Access will be keen to discuss more deals with StanChart should it seek to quit markets elsewhere, Ogbonna said.
“We’re much closer partners,” he said. “Where Standard Chartered seeks to leave a market and we’re present, we should be their preferred counterpart institution to deal with,” he said.
Commenting on Nigerian President Bola Tinubu’s policies of the past two months to loosen the exchange rate regime and scrap fuel subsidies, Ogbonna said they were hard but necessary measures. The steps have seen the local currency, naira, weaken immediately by about 40%. It traded at 803.9 to the dollar on Friday, according to Lagos-based FMDQ.
“You could see business activity slow down in the short term because costs are elevated, and there’s an inability to pass through those costs on to the market,” Ogbonna said.
The devaluation won’t endanger Access Bank’s ability remain above the regulatory capital adequacy ratio of 15% for lenders with international operations, as it’s modeled on an exchange rate of 900 naira to the dollar, Ogbonna said.
The bank’s capital adequacy was 19.6% at the end of 2022, down from 24.5% in 2021, with $28.8 billion in assets as of March 2022.
“We’re above the regulatory thresholds,” said Ogbonna. “It isn’t where we want to be in terms of our internal limits, but our internal limits are higher than the regulatory thresholds anyway.”