Nigeria’s largest bank, Access Bank Plc, has said that it expects to generate as much as 30% of profit outside its home market, following a series of acquisitions last year spanning East and West Africa.
The bank which just got regulatory approval to become a holding company expects its African subsidiaries and UK unit to contribute about 25-30% of profit before tax in the next 3 to 5 years from 21% in the third quarter.
According to a report from Bloomberg, the disclosure is contained in a response from the bank to questions through Whatsapp.
The bank in its statement stated that the same level of growth that is expected on pre-tax profit is also projected for assets, deposits, and revenue.
The Lagos-based bank which currently operates in 12 countries, said that it hopes to expand to 8 new African markets by setting up offices in some countries, partnering with existing banks in some nations, or deploying digital platforms to provide services to customers.
Access Bank in its statement said, “We see strong contributions from our key African markets, regional hubs, and our outside of Africa international business driven out of the UK.’’
It said that it plans to grow its risk assets by 10% this year to provide support to customers whose businesses are benefiting from the coronavirus pandemic such as telecom and health companies.
The bank further said that although Nigeria just exited a second contraction in four years in the fourth quarter, they are still skeptical as they pointed out that the sluggish economy gives no incentive to further boost lending.
Nigeria’s biggest banks such as Access Bank, Guaranty Trust Bank Plc, and Stanbic IBTC Holdings Plc are diversifying outside their core operations or expanding across Africa in an attempt to boost revenue after the outbreak of the Covid-19 pandemic and the crash of crude oil prices curtailed the home market.
- Sources had in September 2020, reported that Access Bank Plc joined the list of conventional Nigerian banks seeking to diversify and restructure its operations into a holding structure as it announced its Approval-in-Principle from the Central Bank of Nigeria (CBN) to restructure into a holding company.
- The proposed holding company structure would enable the bank to further accelerate its objectives around business diversification, improved operational efficiencies, talent retention, and robust governance.
- This is coming after the bank’s recent transaction with Cavmont Bank in Zambia, further ensuring the bank’s presence in the SADC region.
- In Nigeria, the bank is looking to transition to a holding financial institution this year which will enable it open subsidiaries in insurance brokerage and payments.