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Access Bank to raise $1bn fresh capital

By on May 2, 2014

Shareholders of Access Bank Plc Wednesday endorsed the plan by the bank to raise $1 billion to enhance its operations.

The bank stated that the fund would be raised in tranches and time to be determined by its directors, through the issuance of a Medium Term Note Programme.

The fresh capital, according to Access Bank would support its objective of being ranked as one of the top three banks in the industry.

Additionally, following its designation as one of the Significantly Important Financial Institutions by the Central Bank of Nigeria (CBN), Access Bank was expected to have additional one per cent buffer of tier-1 capital.

Speaking at the bank’s 25th annual general meeting in Lagos, Group Managing Director/Chief Executive Officer, Access Bank, Mr. Herbert Wigwe assured shareholders that the capital raising would not destroy the value of their investment.
He however declined to comment on when the capital would be raised.

Wigwe explained: “The most important thing is that should we need more money in the future, in a timely manner, it would be easier to access the market.

“The business of banking is fundamentally about managing risk and managing risk requires some form of capital. So we are raising this money so that we can basically leverage on it to lend customers.”

On his part, the Access Bank’s Chairman, Mr. Gbenga Oyebode noted that the board had considered a variety of available capital raising options and came to the conclusion that having the option of raising additional financing of up to $1 billion or its equivalent in local currency would be the most cost-efficient option to meet the its capital adequacy objectives.

Furthermore, Oyebode pointed out that the injection of fresh capital into the bank’s operations would accelerate the attainment of its aspiration of becoming the “World’s Most Respected African Bank.”

“Enhancement of the Bank’s capital base is a key imperative for the realisation of its developmental goals and commitment to society,” he noted.

Meanwhile, the shareholders also unanimously approved the re-election and election of new Directors to the Bank’s Board. The new directors are Mr. Paul Usoro and Dr. Ajoritsedere Awosika.

Commenting on the bank’s performance, the Chairman, Shareholders Trustee Association of Nigeria, Alhaji Mukhtar Mukhtar said: “Amidst the changes experienced in the operating environment, the ability of the bank to grow deposits is impressive and highly commendable.”

Also, the President, President, Solidarity Shareholders Association of Nigeria (SSAN), Dr. Farouk Umar described that the total dividend payout of N8 billion by the bank as a demonstration of responsibility and fulfillment of the promise of creating value for shareholders.

An analysis of the bank’s results for the year ended December 31, 2013 showed an increase in its deposit base from N1.201 trillion at the end of 2012, to N1.33 trillion in the year under review, while its loan book rose impressively by 33 per cent from N609 billion in 2012 to N810 billion in 2013, showing the bank’s commitment to empowering critical sectors of the economy.

Similarly, the bank recorded an improvement in its cost of funds from 4.5 per cent to 4.6 per cent while Non-Performing Loans (NPL) ratio decreased to 2.7 per cent from five per cent.

 

 

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