Access Bank will raise $300m to meet CBN’s banking recapitalisation –Aig-Imoukhuede

*Aigboje Aig-Imokhuede, Chairman of Access Holdings Plc, expresses confidence that Access Bank will raise $300 million in capital, in view of the commercial bank’s strong market position and shareholders’ support

Isola Moses | ConsumerConnect

Mr. Aigboje Aig-Imokhuede, Chairman of Access Holdings Plc, has expressed confidence that Access Bank will raise $300 million in capital, given the commercial bank’s strong market position and shareholders’ support.

Aig-Imoukhuede stated this in an interview with the News Agency of Nigeria (NAN) on the sideline of the recent Access Holdings’ second Annual General Meeting (AGM), held in Lagos.

ConsumerConnect had reported the Central Bank of Nigeria (CBN), March 29 this year, directed commercial banks in Nigeria with “international authorisation” to increase  their capital base to N500 billion and national banks to N200 billion respectively.

Similarly, non-interest banks with national and regional authorisation will increase their capital to N20 billion and N10 billion, respectively.

The recapitalisation exercise is expected to commence from April 1, 2024, to March 31, 2026.

Following the CBN’s directive on banking recapitalisation, the shareholders of Access Bank, at the AGM, were said to have unanimously backed the group’s plan to establish a capital raising programme of up to $1.5 billion.

The shareholders also agreed to the subset initiative to raise to N365 billion specifically, through a Rights Issue of Ordinary Shares to its shareholders.

According Access Bank, proceeds of the Rights Issue will be used to support ongoing working capital needs, including organic growth funding for the group’s banking and other non-banking subsidiaries.

The Chairman as well explained that in regard to the announcement of a capital raising through Right Issue, he is therfore, confident that the banking group’s shareholders would support the bank in this regard.

Access Holdings, he noted, has a unique relationship with the capital market in Nigeria and internationally.

Aig-Imoukhuede stated: “It is not the first time CBN is coming up with such policy.

“Recall that in 2004 when CBN announced that all banks must recapitalise to the tune of N25 billion and Access Bank had about N3 billion of capital.

“Between 2004 and 2007, our team, when I was the CEO of the bank, raised two billion dollars of common equity capital.”

He equally said: “Therefore, in 2024 when Access Holdings is much older, wiser, stronger, larger and significantly respected by the capital market with over 800,000 shareholders, raising 300 million dollars in capital for Access Bank, its banking subsidiary is not really much of a challenge.

“We signalled to the market first that we will be doing a Right Issue, which means that we must carry everybody along, in spite of our large institutional shareholders.

“Nonetheless, we believe in ensuring that shareholders, either large or small, continue with us on our journey.

“They have always supported us when need be with good reasons, because they believe in the company and the performance that would be delivered subsequently to such capital raising exercise.

“What is on the mind of our shareholders now is recapitalisation and they are also concerned about how their company continues to deliver returns,” he said.

In respect of the CBN recapitalisation policy, he said that Access Bank as a group endorses the CBN policy wholeheartedly.

Describing the policy as a good and sensible prudential regulation, the Chairman also noted that banks, particularly after a period of significant devaluation of domestic currency, volatility in the foreign exchange, and interest rate regime, are always encouraged to build up their capital buffer.

This is to ensure that whatever adverse effect may arise as a result of the dynamic changes in the business environment would not affect their very concern, he stated.

On performance, expectations from Access Holdings

In connection with performance and expectations from Access Holdings going forward, Aig-Imokhuede stated that the earning profile of the group, which is spread across Nigeria, Africa and outside Africa subsidiaries, is very robust.

The Group Chairman also said: “As an investor, you always look to see whether there is deep concentration where the profit is coming from; in our case, these areas are spread across three core areas that is of significant interest to local and international investors.

“If you look at the performance of banks in the year ended 2023 financial reports, you will see that all banks in naira terms have increased significantly their profitability as a result of the devaluation.

“But that isn’t the case with Access Bank, whose revaluation benefits come from the fact that it has significant international operations because it is not a function of holding large foreign currency balances.”