Access Bank: Wigwe’s plot to take over Africa

Africa

Herbert Wigwe, GMD, Access Bank

By OKEY ONYENWEAKU

From a modest office which had housed Access Bank on Oyin Jolayemi Street, a few years back to the gigantic former head office of the defunct Intercontinental Bank on Adeola Odeku Street, all indications today are pointing to the fact that the impressionably strong-willed and focused even when it was yet modestly endowed financial Institution of that earlier era is still eager to dominate the banking industry.

A few weeks ago, the lender moved its corporate headquarters into yet into another new edifice on Oniru in Lagos, a more befitting head office for a bank which recently became the largest financial institution by asset size.  The new office was built by the defunct Diamond Bank, the lender it acquired last year.

Access Bank has within the last few years acquired two big banks that many see as having been originally bigger than the financial institution itself.

‘’This is indeed not a mean feat. Who knows the next move by the bank whose ambition is to dominate Africa,’’ a senior banker who would not want his name mentioned in print said.

And that may already be panning out as already, the lender that boasts over 600 branches and over 28,000 employees in Nigeria and outside has again hatched out far-reaching strategic plans to take Africa by storm.

‘’We will be Africa’s gateway to the world,’’ Herbert Wigwe, Group Managing Director of the bank declared recently. This information has sent the banking industry reeling with questions being asked again. How does the bank want to achieve this tall ambition given the turbulent operating environment in Nigeria and the world at large?

Indeed, this is not the best of times for the economy all over the world. The expectation for the world economy is bleak and has several times been reviewed downwards. Back home projections for Nigeria only stood at a mere 2.55 per cent in 2019. Further, these were growth projections before the invasion of the deadly disease, Corona Virus ( Covid-19). Industry analysts fear that the world economy may slide into recession given the intensive spread of Covid -19 which has also dragged down the price of crude that is now hovering between $30 and $35 per barrel.

In Nigeria specifically, a huge chunk of the country’s revenue comes from crude whose price has fallen badly. Inflation is still raging unabated at 12.13 per cent, the N10.3 trillion budget for 2020 does not seem implementable for lack of revenue, insecurity is at its highest point as many are killed daily by the nefarious acts of Boko Haram and murderous herdsmen among other insurgents who have made the bushes their homes, An unstable political environment, low foreign inflows and forex volatility are additional hiccups.

For businesses to survive in such an unfavourable environment is a tall order and. Access Bank operates in the same gloomy environment painted above. However, an insider confided in Business Hallmark that very vigorous scenario building is going on in the bank now as to the best way to achieve the new targets. Access Bank appears to only see possibilities even as it explores ethical means to achieve its vision. As a bank that is always trying to break the glass ceiling, this declaration to be the unrivalled gateway to the 1.3billion African market has elicited discourse on Broad and Marina streets of Lagos even though they see it as a tall ambition.

But those who know Herbert Wigwe, believe that such craving is nothing but true to his character and that his kind of person does stop at anything to achieve his set goals.

Indeed, Wigwe has been there at Access from the beginning. In 2002, when the two musketeers (Herbert Wigwe and Aigboje Aig-Imoukhuede) left their comfortable positions as Executive Directors of arguably the best financial institution in Nigeria, GT Bank, the perception crisis that followed was about how they would be ditching a brand that was already a high-flier to go to plumb what was then struggling, if not an almost dilapidated bank.

Underscoring the fact that they were in it together, it is quite difficult for Imoukhuede, Wigwe’s predecessor, to boast of his successes during his term in office atop the leadership of the bank, without the invaluable contributions of his Siamese twin (Wigwe). Some sources even go as far as to suggest that the thorough-bred banker was the engine room of operations even in that era. But it is a point that Access Bank would remain moot on.

Corroborating his strengths, however, since 2012 when Wigwe took over the headship of the bank, the institution has been on a corporate upward swing showing stability, creativity and, some would say, brazenness in the face of growing economic uncertainty which started from 2014 when the economy stumbled into a slow cycle of recessionary and inflationary pressures. To conclude that this is indeed a reflection of Wigwe’s leadership capabilities that he has presently brought to bear upon the fortunes of the bank is not, therefore, a far-fetched presumption.

At the end of 2019, Access Bank again sparkled with a quite impressive post-merger result.

Swimming against the tide of a seemingly harsh macro-economic environment, the lender projected strength once again with an impressive performance in its audited results for the year ended 2019.

The banking giant recorded an 11.8 per cent increase in profit in the period of review.

The gross earnings also edged up 26.1 per cent to N666.75billion in 2019 from the N528.74 billion it had achieved in the corresponding period of 2018.

The net interest income for full-year 2019 also rose by 59 per cent to N277.2 billion as against the N173.6 billion, which was recorded for the corresponding period in 2018.

Market observers believe that the bank’s impressive performance was boosted by the bank’s net fee and commission income for full-year 2019 which came to N74.05 billion as against the N52.5 billion for the corresponding period for 2018. This represents an impressive 41 per cent increase.

With creative and efficient management, the lender grew its profit before tax for the group for full-year 2019 by 11.8 per cent to N115.38 billion from the N103.2 billion that was recorded in the corresponding period in 2018.

Its profit after tax also rose 2.7 per cent to N97.5 billion as against the N94.98 billion which was achieved in a similar period in 2018.

The bank’s balance sheet equally revealed that there was a massive jump in loans and advances to customers which grew by 46.04 per cent from N1.9 trillion to N2.9 trillion in 2019.

Deposits from customers as of December 31, 2019, almost doubled as it grew by 65.9 per cent to N4.25 trillion as against the N2.56 trillion which was recorded for the corresponding period in 2018.

Accordingly, the bank’s board of directors declared a final of 40 kobo per share.

This brought the total dividend payout for the financial year ended December 31, 2019, to 65 kobo per share.

Whereas the bank’s performance according to analysts revealed the strength and the goal-oriented financial institution, they cautioned the management on the rising personnel expenses and other operating expenses which rose by 34 per cent and 30 per cent respectively.

Since its merger, the bank sprinted against predictions of hard times which sometimes come with mergers or acquisitions considering the speculated sorry and basket case of the defunct Diamond Bank. However, with what seemed to be a magic wand, Wigwe and his management team thought otherwise and creatively and efficiently turned a bad case to a gold mine within about 18 months.

Aside from the impressive performance of the period ended December 31, 2019, the bank had displayed strength and increased profit after tax increased by 44.2% to N90.74bn from N62.91bn in Q3 2018.

Similarly, the bank’s profit after tax jumped 59 per cent to N63billion in half-year from N39.6 billion recorded in the same period in June 2018.

Market observers noted that the impressive performance of the bank in the second and third quarters of the lender was a consolidation of the first quarter which profit after tax leapt by 88 per cent to N41.1 billion from N21.9 billion in the corresponding period of 2018.

Despite fears that the country’s economy whose growth rate stood at 2.55 per cent as at December 2020 may relapse into the red zone given a mirage of challenges, Access bank has grown solid figures in most of the measurement indices in the last five years. For instance, its total assets have increased by175.7 per cent from N2.59trillion in 2015 to N7.46 trillion in 2019. While profit before tax also grew 54.5 per cent in 5 years, Gross earnings has jumped by 97.6 per cent. This puts the bank in good stead to launch another strategic and aggressive plan for a higher competitive edge beyond Africa.

Whereas the snail pace growth of the economy has constituted a drag on the entire banking industry, Banks such as Access, GT Bank, Zenith Bank, UBA, Fidelity Bank among others have deployed varied innovations to continue to survive and grow in a smothering operational environment.

“We want to have subsidiaries across 22 countries over the next five years, with strategic plans to be present in the major trade corridors in the African continent. Building on our successful expansion into Kenya, we will also be making entries into Angola and Mozambique.”

“At the moment, Access Bank does not have a presence in the Francophone region of Africa, and we will be working to see that this is changed in the coming years. By 2023, Access Bank will have consolidated its position as Africa’s gateway to the world with about 100 million customers in Nigeria and an additional 20 million customers across our African subsidiaries,” Wigwe has reportedly said.

The Group Managing Director, Access Bank Plc., talking about the Bank’s growth trajectory, said, “In the last twelve months, Access Bank has grown into a powerhouse in the Nigerian and indeed, African banking industry. We are happy with all the successes recorded so far, and we hope to reach and surpass other targets we have set for ourselves. Access Bank will continue on its journey to becoming Africa’s gateway to the world, through strategic expansion into new and emerging markets within and outside Africa and providing a best-in-class customer experience.”

This performance is what not only gives Herbert the courage to work towards dominating the industry but to also launch stronger into the African territory with presence in over 22 countries and beyond.

Amidst storm clouds in 2005 when a Central Bank of Nigeria, under Professor Chukwuma Soludo insisted that all banks be recapitalized to a new capital base of N25billion, Access Bank was one of the very few later day millennial banks that met the target. Several others either got absorbed by bigger entities or simply vanished. By 2008 when the global financial meltdown had started putting pressure on the local markets and a second round of consolidation was advocated by the CBN, this time under CBN Governor, Sanusi Lamido Sanusi, Access Bank did what many considered unthinkable or well neigh impossible, it took over one of the most iconic public sector and church-supported institutions in the banking market at the time, Intercontinental Bank.

Again, in 2018, Wigwe saw the opportunity to accelerate the bank’s five-year plan with the merger of Diamond Bank, Nigerian’s leading retail bank with 19 million customers, including 10 million mobile customers, and a strong reputation for data analytics and technological innovation.

This strategic move has not only paid off, but it also established it as the largest bank in Nigeria, a position it is not ready to relinquish. Wigwe has handled the acquisition of Diamond Bank brilliantly.

With these successes, the only thing left for Access Bank is to take further risks since the appetite is there. And the continent and the world wait!

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