Access Bank looks beyond Nigeria amid uncertainties in home market

Nigeria-based Access Bank PLC is considering expanding into eight more countries in Africa to capitalize on the benefits of the continent's free-trade pact amid projected uncertainties in the local banking sector.

Nigeria's second-largest bank by assets generates around four-fifths of its revenue in its home market. CEO Herbert Wigwe has said that the bank, which already operates in 12 countries, has identified Algeria, Angola, Egypt, Ethiopia, Ivory Coast, Morocco, Namibia and Senegal as markets of interest and aims to eventually expand into 22 countries on the continent.

In November 2020, S&P Global Ratings said it expects the operating conditions for the banking sector in Nigeria, Africa's biggest oil producer, to remain uncertain due to the fall in oil prices in 2020 and the impact of the coronavirus crisis on the economy.

Access Bank made 79.92% of its third-quarter 2020 operating income in Nigeria, down from 84.89% in the year-ago period, S&P Global Market Intelligence data shows. In contrast, the contribution from other African countries to the bank's operating income increased on a yearly basis to 14.45% from 8.59%.

The bank reported group profit attributable to owners of the bank of 100.90 billion naira for the nine months ended Sept. 30, 2020, up from a restated 87.45 billion naira in the prior-year period.

Nigeria accounted for 60.67% of the bank's pretax profit in the period, down from 68.29% in the third quarter of 2019, while the rest of Africa's contribution to its pretax profit almost doubled year over year to 21.76%.

Access Bank's new expansion plans followed a number of acquisitions in the continent in 2020, including its purchase of a 99.98% stake in Kenya-based Transnational Bank PLC.

As of Feb. 2, US$1 was equivalent to 380.50 Nigerian naira.