Access Bank acquires majority stake in BancABC Botswana

Access Bank Plc has completed acquisition of the majority equity stake in Botswana’s fifth largest bank, African Banking Corporation of Botswana (BancABC Botswana) Limited.

Touchaheart blog reports that in a regulatory filing at the Nigerian Exchange (NGX), Access Bank stated that it has completed acquisition of 78.15 per cent in BancABC Botswana.

BancABC Botswana, a well-capitalised bank poised for growth, is expected to form part of Access Bank’s nexus for trade and payments in Southern Africa and broader COMESA trade region.

Access Bank stated that BancABC Botswana’s achievements in retail banking space will provide an opportunity for it to deploy its best-in-class digital platforms and product suites to the Botswana market.

According to the Access Bank, the acquisition would enable BancABC Botswana to compete better in its core business segments.

Group Managing Director, Access Bank Plc, Dr. Herbert Wigwe said the successful completion of the acquisition would provide significant synergies by combining BancABC Botswana’s strong retail banking operation with Access Bank’s wholesale banking capabilities.

“It will also strengthen the quality of earnings through revenue diversification and growth in the corporate and SME banking segments for BancABC Botswana. The combination is another step towards our broader vision of becoming the World’s Most Respected African Bnak,” Wigwe said.

Wigwe had recently noted that over the last few months, the banking group had successfully completed acquisitions in South Africa, Mozambique, and Zambia, emphasising its footprint in key markets around the globe.

“We will continue to grow our presence in geographies with significant growth potential, especially where they support our global customers. As we become Africa’s Gateway to the World, we would also seek markets which support our trade and payments aspirations and the African Free Trade Agreement,” Wigwe said.

According to him, to further enhance its operating efficiency and ensure strong returns on invested capital, the bank would bring the best of group assets, specifically digital banking capabilities that support individuals and businesses, enhance financial inclusion, and deliver the benefits of a strong network effect across its enlarged group.

“Throughout the pandemic, we have been able to demonstrate our ability and willingness to support our customers, our communities, and our colleagues. As the outlook improves, and as business returns to a new normal, we will continue to support our communities in order to stimulate growth and create new opportunities,’’ he said.

To accomplish our vision to be the World’s Most Respected African Bank, we are working together across the group on the back of our robust balance sheet, increased retail momentum and efficiency,” Wigwe said.

Touchaheart blog gathered that key extracts of the audited report and accounts of Access Bank for the six-month period ended June 30, 2021 showed that gross earnings rose by 14 per cent from N396.8 billion in first half 2020 to N450.6 billion in first half 2021. The bank’s top-line remained anchored on its core banking activities with interest and non-interest income accounting for 71 per cent and 29 per cent respectively. Profit before tax the period rose by 31 per cent from N74.3 billion to N97.5 billion. After taxes, net profit rose by 42 per cent from N61 billion in first half 2020 to N86.9 billion in first half 2021. The overall profitability outlook was driven largely by a robust growth across income lines and increasing operating cost efficiency. The bank’s core business interest income rose by 30 per cent growth while net fee and commission income grew by 45 per cent. Meanwhile, interest expense slipped by 0.7 per cent.

The bank’s balance sheet closed June 2021 at N10.1 trillion, 16 per cent above N8.7 trillion recorded at the end of the year ended December 31, 2020. Net loans and advances also increased from N3.6 trillion in December 2020 to N4.0 trillion in June 2021. Despite loan increase, non-performing loans (NPL) ratio remained flat at 4.3 per cent, below the industry’s benchmark of 5.0 per cent. The bank’s capital and liquidity ratios remained well above regulatory benchmarks, with a Capital Adequacy Ratio (CAR) of 21.3 per cent and a Liquidity Ratio (LR) of 50.7 per cent, which enabled the bank to drive its aggressive growth strategy.

Further analysis showed that cost-to-income ratio declined by 5.70 percentage points to 60.1 per cent in first half 2021 as against 65.8 per cent in first half 2020. A breakdown of the top-line indicated that retail banking business grew by 24 per cent from N95.8 billion in first half 2020 to N118.6 billion in first half 2021. These included 46 per cent increase in interest income and 37 per cent growth in revenue from channels and digital businesses. The strides in retail business drove savings deposits up by four per cent to N1.4 trillion in June 2021 from N1.3 trillion in December 2020. Cost of funds reduced to 2.9 per cent in first half 2021 as against 3.7 per cent in first half 2020.

Shareholders of Access Bank received about N10.7 billion as interim cash dividends for the first half 2021.The interim dividend per share of 30 kobo represented a 20 per cent increase on 25 kobo per share distributed for the first half of 2020, in line with the established dividend payment pattern of Access Bank, which pays dividends twice a year.