People walk past Access bank along Herbert Macualay way in Abuja,
Nigeria, on August 30, 2017. The bank controls over $13 billion worth of
assets and over 27 million customers. PHOTO | REUTERS
Access Bank Plc, Nigeria’s largest retail lender, has acquired
Kenya’s Transnational Bank, kick-starting its plans to open shop in all
major Eastern Africa markets.
The bank, which already
has a presence in Rwanda, says it is seeking to expand in the region
through acquisitions and setting up of greenfield operations, in a move
that is set to deepen competition for customers with local rivals.
Access
Bank, which controls over $13 billion worth of assets and over 27
million customers, has drawn a five-year plan (2018-2022) that seeks to
shore up its retail and wholesale banking business and position it as
“the world’s most respected African bank.”
The Nigeria
Stock Exchange (NSE)-listed lender is also eyeing East Africa’s nascent
oil and gas sectors, counting on it its track record in financing
upstream and downstream fuel projects.
Access Bank
Group’s Deputy Managing Director Roosevelt Ogbonna in an interview with
CNBC Africa last week said Kenya is just one of several markets that the
bank is seeking to enter as part of its Pan-African expansion plan.
“As
you all know Kenya has significant market share within the East African
corridor and that is why we are going there. I think the idea is really
not just about Kenya. As part of our five-year strategy we expect to be
Africa’s gateway to the world and to drive international and global
collaborations and that is what you see playing out with Kenya,” said Mr
Ogbonna.
“If we are going to be Africa’s gateway to the world supporting
intra-Africa as well as inter-Africa trade we have to be in Key markets
within Africa and within the global space as well. And so Kenya is just
one of the many key markets in Africa where we are seeking to take
opportunity.”
The bank is looking for more acquisitions
across Africa while also planning to set up its own banking
infrastructure in other markets.
“As we spread and look
at opportunities across Africa, some might be greenfield others might
be emanating opportunities that we see we could take advantage of,” said
Mr Ogbonna.
Access Bank’s increased focus on retail
banking comes as a survey conducted by McKinsey & Company last year
(2018) showed that the retail market —people earning less than $417 per
month—will be the driving force of African banks from 2017 to 2022, and
expensive banks will be rejected by these customers.
The
survey also revealed that retail customers are extremely sensitive to
prices of financial products and are also keen to select banks that
offer them convenience in terms of accessing financial products and
services.
It is estimated that Africa’s banking
revenues will grow by 8.5 per cent per annum from 2017, bringing the
continent’s total banking revenues to $129 billion in 2022, of which $53
billion will be from retail banking.
Over half of the
retail banking customers sampled, however, singled out pricing as their
primary reason for selecting a bank, followed by convenience in terms of
quality of services and proximity of the bank to customers.
Access
Bank recorded 44 per cent growth in net profit to $250 million in nine
months to September 30 this year, buoyed by growth in its retail and
wholesale banking business.
The lender, is in the
process of acquiring 93.57 per cent shareholding in Kenya’s
privately-owned small sized lender Transnational Bank at undisclosed
fee, with its eyes further cast on Tanzania and Uganda.
The Kenyan transaction is expected to be concluded in the next 30 to 60 days’ subject to regulatory approvals.
Other
Nigerian banks operating in Kenya include United Bank of Africa (UBA)
and Guaranty Trust Bank (GT Bank) which acquired 70 per cent
shareholding in Fina Bank Group in 2013.
The East
African banking market is currently dominated by Kenya’s two-largest
retail banks, KCB and Equity, with the recently concluded merger between
NIC Bank and Commercial Bank of Africa (CBA) creating the third-largest
lender in the region.
Access Bank expects to undertake
trade financing through its UK office, leverage on its digital capacity
and capabilities to create connections between customers and markets
across Africa and to provide a platform called ‘Access Africa’ that
allows both person-to-person as well as business-to-business
transactions.
The lender currently has over 10 million
mobile customers who can start and terminate transactions through mobile
phones in 19 African countries.
Access Bank also has a
presence in Rwanda, Ghana, Gambia, Sierra Leone, Democratic Republic of
Congo (DRC), Zambia and the United Kingdom, with representative offices
in Lebanon, India and China.
No comments :
Post a Comment