Banking is getting more interesting with market leaders taking bolder steps to stay ahead of the competition. Access Bank Plc recently adopted the Holding Company Structure, which has diverse benefits for its customers and other stakeholders. The bank is using technology to serve its rising customer base within Nigeria, Africa, and other parts of the world where it has its footprints. Its commitment to quality customer service and better returns for shareholders will continue to keep it ahead of the competition, writes COLLINS NWEZE.
In every country, the banking sector is a critical segment that determines the strength of its economy.
Similarly in Nigeria, banking has come to represent almost everything. From job and wealth creation, and infrastructure funding to businesses’ empowerment, the banking sector is seen as the backbone of the economy.
That explains why many commercial banks continue to ensure that their commitment to customers, businesses and the economy is total.
In early 2000, when Access Bank Plc came into being, the industry had several big players that were almost difficult to displace because of their years of operation and strong customer base.
Today, the bank has against all odds, remained one of the top three dominant players in the industry.
Speaking during a meeting with financial reporters in Lagos on the bank’s growth trajectory, Group CEO of Access Corporation, Herbert Wigwe, said: “We got into Access Bank in 2002 and shared with the market the fact that we wanted to create the world’s most respected bank in our first five years. In 2002, we were a tiny institution and we were 69 in terms of the list of banks in the country. We shared on the floor of the stock exchange what we wanted to be. We told ourselves that we wanted to be one of the top 10 banks in Nigeria. There was hardly any space for us. But in that first five years, we moved from where we were to become one of the top 10 banks in the country.”
Continuing, he said: “It helped because we had a Prof. Charles Soludo who came in less than two years after we got into the bank and insisted on banks increasing their shareholders’ funds from about $20 million to $250 million. Not many bank could make it. Apart from the top five or seven banks. That single policy led us into the market, we raised capital and acquired some banks and through that process, we became one of the top 10 banks in the country.”
Wigwe explained that the bank had then, spent a bit of time with HSBC understudying how it had grown from becoming a small bank to one of the largest in the world.
He said his team learnt from HSBC team what they had done and the things that needed to put in place if Access Bank were doing an acquisition.
So, by 2009 when we had that crisis in the world, Access Bank was one of the strongest on the continent.
The third planning cycle
Wigwe said the bank moved into the third planning cycle, 2012 to 2017, during which it wanted to be one of the top three banks in the country.
“Now, as you know, when you start to move from the smaller base, it is easier. To move from about 100 to top 10 is easier, than from top 10 to top five, and to move from top 10 to top five is easier than moving from to 10 to top three. So, we shared that we wanted to be among the top three in the market. But we started working on it, and this time we were growing organically and in all of this, we had started growing outside of Nigeria and the idea was to basically start diversifying our earnings from Nigeria,” he recalled.
That vision was realised when the bank in 2017 became one of the top three banks in the country.
“Of course, we are in the last five-year corporate strategy plan, which ends in 2022 and we told ourselves that we want to be the leading bank in Nigeria and to be the world’s most respected African banks. And part of what we wanted to do is to be Africa’s gateway to the world. Obviously, there are a couple of things that are important to us: Firstly, is to ensure that we have a strong and diversified base; secondly is to ensure that several things around how we do business and issues around sustainability remain important to us; and, thirdly, is to support financial deepening and financial inclusion across the country and, fourthly, to start ensuring that the quality of our earnings and the reliability and strength of our balance sheet is solid.
“So, in the period, we did the acquisition of Diamond Bank and through that, we used the strong elements of what we wanted do which had to do with digital banking and making sure that we started lending more to retail. So, as of March 2022, exactly 20 years after we started, we are definitely the number one bank in Nigeria, in terms of balance and customer base,” he said.
The HoldCo Journey
Wigwe explained that there were several things they were thinking of as they moved into the next phase of the bank’s growth.
“So, having come from 20 years and got to where we are, we are on the verge of basically taking the institution to a totally different bank. So, are moving from just being a Nigerian institution to creating a much-more diversified institution in scale, scope and the nature of things that we do. Access Bank is basically transforming and we are creating a holding company and I will give you some of the reasons we are doing what we are doing.
“First of all, the world is changing and technology has changed how things happen. I recall that about 25 years ago, if you wanted to sell debit cards, it was impossible. But that is gradually becoming extinct because a lot more payments are happening digitally. Secondly, if you look at the demography in the world, what they are asking for is digital payments and they are not waiting for the traditional banking system. That is, for them to do several things through the touch of the button,’’ he said.
Access Holdings Plc takes off
Access Holdings Plc, trading as Access Corporation, has announced its start of operations, with initial portfolio companies and its future strategy.
The company explained that the corporation, which builds on Access Bank’s scale and standards, would have portfolio companies with significant complementarities, allowing the ecosystem to walk with customers across their life cycle while delivering value to stakeholders.
On its debut, Wigwe reportedly said in the statement: “Many of you would have heard us talk about Access Corporation earlier this year. This natural evolution of our company will ensure that we continue to use digital tools and our partnership with fintech to support our customers’ lifestyles outside of the banking system.
“We have set our sights on and delivered ambitious plans to transform the African financial services sector over the last 20 years. Until, we have concentrated on banking, with the goal of becoming the World’s Most Respected African Bank. Our banking subsidiary is Nigeria’s largest bank by assets and Africa’s largest in terms of customer base.
“It is time for us to take the next transformative step, where we provide our customers with beyond banking services delivering new interconnected financial services across customers’ needs.”
The corporation would comprise verticals cutting across the banking, payments, consumer lending, insurance brokerage and asset management.
“Access Bank Group will continue to operate in Nigeria and through its subsidiaries and business offices in Africa, Europe, and Asia. These businesses, when combined, will position Access Corporation to provide banking services, including intra-and inter-Africa trade, consumer lending, payments services, and insurance services to our customers, thereby improving wealth diversification and preservation.
Playing big in AfCFTA
The need to formalize Africa’s trade opportunities led to the implementation of the African Continental Free Trade Area (AfCFTA), which also comes with opportunities.
The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, said the AfCFTA, when fully implemented, could afford Nigerian companies preferential access to African markets worth $504.17 billion in goods.
Over the last few years, Access Bank Plc has been on an aggressive expansion journey. From expanding its footprints nationally, the Nigerian bank has been strategically planting branches across Africa and establishing a presence in countries thousands of miles from its headquarters, to take advantage of the widening opportunities on the continent.
One of such ventures by Access Bank was its announcement on the Nigerian Exchange Limited (NGX) that it had acquired 78.15 per cent shareholding in African Banking Corporation of Botswana Limited (BancABC Botswana).
The Company Secretary, Access Bank, Sunday Ekwochi, who made this known, explained that BancABC Botswana is the fifth-largest bank in Botswana and a well-capitalized franchise poised for growth in its local market.
“The new acquisition will form part of the bank’s nexus for trade and payments in Southern Africa and the border COMESA trade region. BancABC Botswana’s achievements in the retail banking space will provide an opportunity for the bank to deploy its best-in-class digital platforms and product suites to the benefit of BancABC Botswana’s customers and enable it to complete strongly across its core business segments,” he explained.
Access Bank has subsidiaries across Sub-Saharan Africa and Europe, providing financial and banking services. They include Access Bank (Gambia) Limited, Access Bank (Sierra Leone) Limited, Access Bank (Zambia) Limited, Access Bank (UK) Limited, Access Bank (Ghana) Limited, Access Bank (D.R. Congo), Access Bank (Rwanda) Limited, Access Bank (Guinea) Limited, Access Bank (Kenya) Limited and Access Bank (Mozambique) Limited.
Also, former Deputy Governor of the Central Bank of Nigeria, Sarah Alade, had noted that a growing number of studies had reviewed the effects of cross-border banking on financial intermediation and efficiency, and found the existence of a positive relationship.
According to her, improvement in the ability of households and firms in a country to access finance and the actual usage of banking services, one way in which the intermediation functions of banks are measured, is enhanced by bank entry. Also, she pointed out that banks are in a better position to lend if they are able to mobilise deposits and increase their asset base.
There is an agreement in the literature that the entry of foreign-owned banks increases competition and efficiency in the banking sector of the host country, she said.
This is mainly because the entry may reduce risk exposures for the banks through greater geographical and sectoral diversification, and enlarge the aggregate quantity of capital invested in the banking sector.
“Researchers and analysts encourage entry of banks as a means of strengthening weak and inefficient banking structures, particularly in emerging economies. Banks that expand internationally are typically more efficient, better capitalized, and come from countries with a more developed banking system,” she added.
Wigwe had said across Africa, there were opportunities for the bank to expand to high-potential markets, leveraging the benefits of the AfCFTA. He had said AfCFTA, among other benefits, would expand intra-Africa trade and provide real opportunities for Africa.
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