Access Bank Plc Loses 20.3% After Acquisition Notice
Access Holdings Plc lost more than 20% of its market value to selloffs in the local bourse following a move to acquire Standard Chartered Bank shares in some banking subsidiaries across African markets.
After a record loss in the week, at the close of the trading session on Friday, Ticker: Accesscorp was worth N531.4 billion with over 35.545 billion outstanding shares. Standard Chartered is selling across the African market, and Access Bank Plc is making a fresh entry.
Nigeria’s largest financial institution by total assets is not the best performer in the banking sector and has maintained growth by acquisition as its core strategy to spread across African markets.
Standard Chartered recently agreed to sell its subsidiary in Zimbabwe to local investment holding company FBC Holdings as part of plans to exit several African and Middle Eastern countries.
The British bank said the deal is in line with its global strategy to achieve operational efficiencies, reduce complexity, and drive scale. It sold its Jordan unit in March and plans to fully exit Angola, Cameroon, Gambia, Lebanon, and Sierra Leone. It also closed its retail banking operations in Tanzania and the Ivory Coast.
Also, the bank has started trimming roles in middle office functions including human resources and digital transformation in Asia in the last few weeks, according to people familiar with the matter.
In the last seven trading sessions, Access Holdings recorded large unusual trade volumes, resulting in sideways price movement in the local bourse – eventually settling on the negative side for the bank.
MarketForces Africa reported that at the beginning of the week, investors traded 52,411,793, resulting in a push in share price to N18.90 from N18.75 kobo. A reverse experience was noted on Tuesday when 36,032,621 shares traded dragged the market price lower to N18.05.
The next three days’ trading sessions were bearish for Access Corp as investors began to book early exits, citing risks associated with the financial supermarket’s empire building.
“Acquisition cost is building up, integration costs will be heavy given new market dynamics across African markets, while the spate of earnings delivery could slowdown Access Holdings profit performance”, analysts told MarketForces Africa.
Last week, Access Bank Plc and Standard Chartered Bank reached agreements to acquire Standard Chartered’s shareholding in its subsidiaries in Angola, Cameroon, The Gambia, and Sierra Leone, as well as its Consumer, Private & Business Banking business in Tanzania.
In a notice to the regulator, the holding company said these transactions are subject to approval from local regulators and the banking regulator in Nigeria.
In a statement, Access Bank said it would ensure the continuity of banking services for employees and clients of Standard Chartered in the five mentioned countries. The two banks will work closely together to ensure a seamless transition, with the transaction expected to be completed within the next 12 months.
Sunil Kaushal, Regional CEO, Africa & Middle East, Standard Chartered said, “This strategic decision allows us to redirect resources within the AME region to other areas with significant growth potential, ultimately enabling us to better support our clients.
“We look forward to working closely with Access Bank’s team over the coming months to achieve a successful conclusion to this transaction while safeguarding the interests of our valued clients and prioritising our employees.”
Also, Roosevelt Ogbonna, Group Managing Director, Access Bank Plc, expressed his appreciation for being selected as the preferred partner for Standard Chartered Bank in this transaction.
He said Access Bank’s commitment to reshaping the global perception of Africa and African businesses and its vision to be the World’s Most Respected African Bank. Ogbonna also emphasized Access Bank’s focus on building a world-class payments gateway, leveraging technology and partnerships to facilitate efficient global payments and remittances. #Access Bank Plc Loses 20.3% After Acquisition Notice