Access Bank Completes Acquisition of Cavmont Bank
Herbert Wigwe, GMD Access Bank Plc

Access Bank Completes Acquisition of Cavmont Bank

The board of Access Bank Plc on Wednesday announced complete acquisition of Cavmont Bank Ltd by its Zambian subsidiary, Access Bank (Zambia) Ltd.

Mr Sunday Ekwochi, the Company Secretary at Access Bank group disclosed this in a statement submitted to the Nigerian Stock Exchange.

Ekwochi said the acquisition was completed after the bank fulfilled the key conditions, including regulatory approvals.

“The merger of Cavmont into Access Bank Zambia is expected to take place before the end of January.

“Following which Access Bank Zambia will emerge as a stronger well-capitalised banking franchise with improved scale and capacity to deliver sustainable and best-in-class financial services in the Zambian market,” he said.

According to him, the bank looks forward to realising the synergies from the transaction and achieving further growth of the combined platform to the benefit of all stakeholders.

“Growing our presence in Zambia remains a strategic priority for Access Bank and with the conclusion of the proposed merger with Cavmont, the bank looks forward to realising the synergies from the transaction,” he added.

Currently, Access Bank is the largest by total asset in Nigeria after its recent acquisition of defunct Diamond Bank Plc.

The bank target is to be gateway to the global financial hubs, and the group indicated plan to enter more African countries.

Read Also: “Zambia is experiencing debt distress”

The group reported a 14.7% year on year growth in gross earnings to ₦576.7 billion in its 9-month of financial year 2020 result from ₦502.8 billion.

Despite multiple economic threats that permeated the operating environment in 2020, lender grew both top and bottom line strongly.

Its third quarter of financial scorecard showed that lender’s earnings lift was supported by more than two-fold increase in non-interest income.

Non-interest income for ₦201.5 billion from ₦97.7 billion in the comparable period in 2019.

Profit after tax accelerated faster than topline growth at 15.7% to ₦102.3 billion in the 9M-2020 from ₦88.4 billion in the comparable year in 2019.

In Q3-2020, the lender reported a 2times quarter on quarter jump in earnings, lifted by a 29.7% rise in net interest income.

Highlight of the result indicated that net interest income rose by 29.7% quarter on quarter on higher interest income.

Followed an improved interest earnings assets, interest income jumped +12.0% quarter on quarter and interest cost savings decline 3.8%.

Lender’s non-interest income pulled back 4.9% quarter on quarter, as net trading losses of ₦50.7 billion as against a gain of ₦51.9 billion in Q2-2020 offset the impact of ₦78.9 billion in FX revaluation gains.

The bank has reported revaluation loss of ₦11.5 billion in Q2-2020 and there was a 77.6% growth in net fee income in Q3-2020.

Operating expenses eased 13.6% in the Q3-2020 from Q2-2020 results, leading to a contraction in cost to income ratio to 54.7% from 70.1% in the prior quarter.

But, impairment charges rose more than two-fold to ₦17.8 billion, forcing a 40 basis points jump in cost of risk to 1.4%.

However, lender’s assets quality improved as non-performing loan ratio moderated further to 4.2% from 5.0% in the prior quarter.

Its unaudited result showed that gross loans rose 2.5% funded by a 12.8% increase in customer deposits during the review quarter.

Meanwhile, lender’s remained adequately finance with capital adequacy ratio (CAR) inched higher to 21.1%, above the 15.0% regulatory limit.

Access Bank Completes Acquisition of Cavmont Bank