Nigeria’s Access Bank Injects $9M Into Rwandan Subsidiary

Access Bank

June 2, 2020//-Nigeria’s largest retail bank, Access Bank Plc, has more than doubled its investment in its Rwandan subsidiary after acquiring Kenya’s Transnational Bank four months ago.

Access Bank, with more than 36 million customers across the continent, is boosting the performance of its East African subsidiaries. Access Bank (Rwanda) posted a 56 per cent drop in net profit to $646,702 from $1.46 million in 2018 according to the bank’s 2019 annual report.

According to the bank’s latest financial statements for the first quarter (January-March) 2020, the Nigerian lender has injected $9 million in additional capital into the Rwandan subsidiary, increasing its investment in the bank to $13.32 million from $4.02 million, to solidify its position in the regional banking industry.

Access Bank Plc owns 75 per cent shareholding in its Rwandan subsidiary, which has eight branches across the country.

On February 1, 2020 Access Bank Plc acquired all the shareholding of Kenya’s Transnational Bank at undisclosed fee.

Transnational Bank, which commenced operations in December 1985, has 28 branches, across Kenya.

Access Bank Plc is the largest bank in Nigeria with a total asset base of more than $16.10 billion, with subsidiaries in the Democratic Republic of Congo, Gambia, Ghana, Nigeria, Rwanda, Sierra Leone, Kenya, Zambia and the UK.

The bank also operates representative offices in China, United Arab Emirates, Lebanon and India.

In 2019, Access Bank obtained the Central Bank of Guinea’s approval to set up a subsidiary in the country through 100 per cent acquisition of a local bank at an estimated cost of $14 million.

Access Bank is targeting the regional banking market as part of its five-year plan (2018-2022) that seeks to shore up its retail and whole sale banking business and position the institution as the world’s most respected African bank.

“In our quest to create an integrated global franchise, we intend to build a presence in key Eastern African countries as well as Asia. By expanding our reach in these regions, we are aiming to make the most of the growth potentials they offer,” said Herbert Wigwe, Access Bank Group’s managing director and chief executive.

ACQUISITIONS

The bank is looking for more acquisitions in African markets, while in other markets it seeks to set up its own banking infrastructure that in most cases has turned out to be more expensive.

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 Kenyan-owned Fina Bank Group in 2013.

Currently, the East African banking market is 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 bank.

In March 2019, Access Bank merged with Diamond Bank Plc mainly to expand its retail footprint, complement the Bank’s existing corporate franchise and create a diversified lender that can support all its customers’ needs.

Five-year plan

Access Bank is targeting the regional banking market as part of its five-year plan (2018-2022).

It owns 75 per cent shareholding in its Rwandan subsidiary, which has eight branches across the country.

On February 1, 2020, the Bank acquired all the shareholding of Kenya’s Transnational Bank.

Access Bank is looking for more acquisitions in African markets as it seeks to set up its own banking infrastructure.

https://www.theeastafrican.co.ke/

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