By Jeph Ajobaju, Chief Copy Editor
Access Bank is plotting the graph to generate 30 per cent of profit outside the shores of Nigeria, pinning hopes on recent acquisitions across East and West Africa.
Nigeria’s biggest lender expects African subsidiaries and its unit in the United Kingdom to account for between 25 and 30 per cent of profit before tax in the next three to five years, from 21 per cent in the third quarter of 2020 (Q3 2020).
The bank disclosed in response to questions from Bloomberg via WhatsApp that the same range of addition to pre-tax profit is project to assets, deposits, and revenue.
Nigeria’s biggest lenders, including Access Bank, Guaranty Trust Bank, and Stanbic IBTC Holdings, are diversifying outside their core operations or expanding across Africa to boost revenue after Covid-19 and a plunge in crude oil curtailed the home market.
“We see strong contributions from our key African markets, regional hubs and our outside of Africa international business driven out of the UK,” the bank told Bloomberg.
The bank also disclosed plans to grow loans by 10 per cent this year to support clients whose businesses are benefiting coronavirus such as telecom and health companies.
It added that although Nigeria exited a second contraction in four years in Q4 2020, the sluggish economy gives no incentive to further boost lending.
Expansionary vision
Access Bank, which currently operates in 12 African countries, plans to expand into eight additional countries on the continent in quest of profit from a free trade pact now in the works by African leaders.
It also plans expansion into another two countries in the long term, to operate in a total 22 countries in Africa, Chief Executive Officer Herbert Wigwe disclosed on an investor call from the Lagos headquarters earlier this month.
Deputy Managing Director Roosevelt Ogbonna explained that Access Bank will set up offices in some countries and in others go into partnerships with existing banks or leverage on its digital platforms to provide services to customers.
He said the bank will “in another month or two, once the arrangements have been put in place,” clarify the nature of operations in some of the countries.
Access Bank disclosed in an online presentation that
· Its markets of interest are Morocco, Algeria, Egypt, Ivory Coast, Senegal, Angola, Namibia, and Ethiopia
· It will use its unit based in London as an “anchor for growth” to expand representative offices in countries such as India, Lebanon, and China.
The African trade pact aims to lift intra-regional commerce by lowering or eliminating cross-border tariffs, facilitating human and capital movement, promoting investment, and ensuring a continental-wide customs union.
Access Bank plans to eventually expand into 22 African countries to cushion challenges in some markets, diversify earnings and take advantage of growth opportunities in the region, according to the presentation.
The bank, which is looking to transition to a holding company this year, plans to open subsidiaries in insurance brokerage, consumer lending and agency banking as well as payments to boost revenue, Wigwe said.