- Targets N365bn by way of a Rights Issue
Access Holdings Plc, one of Africa’s leading financial groups, has unveiled plans to establish a capital raising programme of up to $1.5 billion.
This is as the Central Bank of Nigeria on Thursday announced its new banking sector recapitalisation plan of N500 billion for commercial banks in Africa’s largest economy.
The apex bank had said the recapitalization exercise was aimed at getting the financial system ready to support the $1.0 trillion economy proposed by the Federal Government.
Meanwhile, Access Holdings is one of the banks that boast of more than required capital base. It announced a total equity of N1.6 trillion as of the third quarter in 2023.
A statement from the bank said the capital raise programme aims to enhance the Group’s financial strength through the issuance of various financial instruments such as ordinary shares, preference shares, Alternative Tier 1 capital, convertible and/or non-convertible debt, bonds, or other capital and/or funding instruments.
“The Programme may be executed through a variety of methods including public offerings, private placements, rights issues, book building processes, or a combination thereof. The specifics regarding the tranches, series, proportions, dates, pricing, tenor, and other terms and conditions that may be associated, will be determined by the Board of Directors, contingent upon securing the necessary regulatory approvals,” it said.
Drawing from the Programme, the Group expects to raise up to N365 billion specifically via a Rights Issue of ordinary shares. The proceeds of the proposed Rights Issue would be used to support on-going working capital needs including organic growth funding for its banking and other non-banking subsidiaries.
The plans for the Programme were disclosed in the Group’s Notice of the 2nd Annual General Meeting to be held on April 19, 2024 which was published on the Nigerian Exchange portal on March 27, 2024.
During the financial year ended December 31, 2023, the Group recorded a robust growth in its Profits Before Tax, posting a healthy N729 billion, representing 335 percent year-on-year (YoY) increase from 2022.
Gross Earnings also surged by 87 percent YoY to N2.59 trillion, up from N1.38 trillion in 2022. This remarkable growth was primarily driven by a 100 percent increase in interest income and a 67.9 percent growth in non-interest income. The Group’s Net Interest Income also demonstrated strong performance, soaring by 93.5 percent YoY to N695.4 billion, compared to N359.6 billion in the previous year. The yield on earning assets also rose remarkably from 9.2 percent in 2022 to 12.8 percent.
“Access Holdings is one of the banks that boast of more than required capital base. It announced a total equity of N1.6 trillion as of the third quarter in 2023.”
Access Holdings’ Loans & Advances expanded by 60.5 percent YoY to N8.9 trillion, accompanied by an improvement in the Non-Performing Loan Ratio, which decreased to 2.8 percent from 3.2 percent in 2022. The Group closed the year with N2.18 trillion in Shareholders’ Funds, marking a significant 77.5 percent growth from N1.23 trillion in FY 2022.
Commenting on the performance, Bolaji Agbede, Acting Group Chief Executive Officer, Access Holdings Plc, said, “The Group’s strong performance in 2023 reflects our commitment to delivering value to our shareholders and stakeholders amidst challenging operating environments. The significant growth in our earnings is a testament to the resilience, strategic focus, and efficiency of our team, and reflects the diversity of our offering across banking, pension, insurance, and payments driven by robust risk management, best-in-class corporate governance, and cutting-edge technology. As we look ahead, we remain committed to driving sustainable growth, consolidating our footprint, and accelerating the attainment of our 2027 strategic objectives.”
Access Holdings’ regulatory ratios strengthened in 2023 as Capital Adequacy Ratios for the Group, and its flagship subsidiary, Access Bank, stood at 19.01 percent and 21.09 percent, respectively. The Liquidity Ratio remained robust at 51.8 percent, well above the regulatory threshold.
Roosevelt Ogbonna, Managing Director/CEO, Access Bank remarked on the Bank’s accomplishments, saying, “As we reflect on the results of 2023, characterised by robust growth, strategic acquisitions, and expansion into key trade hubs, I am excited about the prospects for Access Bank. Our relentless focus on customer-centricity, digital innovation, and operational excellence has positioned us strongly to capitalise on emerging opportunities. As we enter the consolidation and efficiency phase of our Africa and international expansion strategy, we remain committed to driving sustainable growth, enhancing shareholder value, and delivering exceptional banking experiences to our customers across Africa and beyond.”
Access Holdings’ other subsidiaries also posted strong results, as Access Pensions Limited recorded a 75 percent growth in gross revenues, amounting to N12.3 billion, while Hydrogen Payment services posted an operating income of N2.1 billion and a PBT of N161 million.
Access Holdings Plc acquired Megatech Insurance Brokers Ltd. (now known as Access Insurance Brokers Ltd.) and successfully completed a $300million capital injection into Access Banking Group, which acquired several entities including Finibanco Angola S.A., and selected Standard Chartered Bank operations in Africa.
Access Bank’s UK subsidiary also opened a branch in Paris and received regulatory approval to commence operations in Hong Kong.
The Group has proposed a final dividend of N1.80 kobo per share for the 2023 financial year, bringing the total dividend payment to N2.10 kobo per share with a total value of N74.6 billion.
