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Nigeria's biggest bank plans to raise $1.8 billion for expansion

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Fri, 29 Mar 2024 Source:

Access Holdings Plc, the parent company of Nigeria’s biggest bank by assets, plans to raise about $1.8 billion to expand its operations over the next four years as it targets becoming one of the continent’s largest lenders.

Access will raise $1.5 billion or the naira equivalent through the issue of shares, bonds or other instruments to fund a five-year growth plan that began last year, the bank’s executives told investors on a conference call in Lagos, Nigeria’s commercial capital, on Thursday. It also plans to raise as much as 365 billion naira ($257 million) by selling shares to existing investors.

“What we are going into the market right now is for a rights issue,” Bolaji Agbede, acting group chief executive officer, said on the call.

The lender is targeting an expansion into new markets such as Morocco, Egypt and the US as part of a strategy to double the share of assets outside its home market by 2027 and rank among Africa’s five biggest banks. It currently has operations in 22 countries including the United Arab Emirates and the UK.

Adbede was appointed as acting group CEO last month, after the death of co-founder and former CEO Herbert Wigwe.

Last week, Access announced a deal to acquire National Bank of Kenya Ltd. from KCB Group Plc, strengthening its foothold in East Africa’s largest economy.

“We are looking at the best capital structure to support our five year strategy as we accelerate execution,” Roosevelt Ogbonna, CEO of the banking unit Access Bank Plc said.

The capital raising comes before a directive from the Central Bank of Nigeria to lenders in the West African nation to shore up their capital to cushion them against a potential deterioration in risk assets as a result of a 70% slump in the value of the naira over the past year.

“Raising additional capital will help banks pursue big projects, mitigate and manage risks,” Ogbonna said.

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