David Olujinmi
Access Holdings spent the bulk of the N351 billion capital raised during its 2024 rights issue on acquiring Standard Chartered subsidiaries across Africa, the bank has revealed.
Roosevelt Ogbonna, Access Bank’s managing director, disclosed this during the group’s FY 2024 investors call. He noted that the bank also invested between $80 and $100 million of the sum in its IT infrastructure.
According to Roosevelt, the capital raise was beyond regulatory compliance.
“We have consistently stated in our market communications that our capital raise had nothing to do with the Central Bank’s directive requiring banks to raise their minimum capital to N500 billion,” Roosevelt noted.
He highlighted that the main purpose of the raise was to support the investment phase of the bank’s strategic cycle.
“So, there should be no surprise that after raising the capital, you didn’t see idle funds waiting for deployment. The capital was deployed immediately, and the impact of that deployment is already visible.”
“Over the past nine to twelve months, we had several critical transactions in motion. One of the most significant was the acquisition of Standard Chartered’s five African subsidiaries, which required substantial capital to close.”
In 2023, Access Bank entered a deal to acquire Standard Chartered’s businesses in Angola, Cameroon, The Gambia, Sierra Leone, and the Consumer, Private and Business Banking business in Tanzania. As of November 2024, the group announced that it had completed the acquisition of the Standard Chartered banks in Angola and Sierra Leone.
According to the auditor’s note for its FY 2024 financials, Access Bank Plc acquired 60 percent of Standard Chartered Bank Angola and 80.66 percent of Standard Chartered Bank Sierra Leone. In 2024, Access Bank Sierra Leone posted a N6.8 billion pre-tax profit, marking a 227 percent growth from the N2.8 billion recorded in 2023.
For Access Bank Angola, it recorded a N13.1 billion pre-tax profit in 2024, marking a 15% surge from the N8.24 million recorded in 2023.
Away from its mergers and acquisitions, the capital raised from its rights issue was also deployed in its IT platform.
According to Roosevelt, “In addition, we made a major investment in our IT platform, which cost between $80 million and $100 million.”
Information from its cash flow statements shows that the group had a capital expenditure of N260.8 billion in 2024. A further breakdown of its capital expenditure shows that it spent N9.3 billion on the acquisition of new computer hardware. However, its income statement showed that the group incurred a N193.5 billion expense on IT and e-business, marking a 148 percent growth from the N78.1 billion incurred in 2023.
After the rights issue, Access Holdings’ minimum share capital grew to N594.9 billion, more than the required N500 billion minimum capital. However, the bank notes that its capital raising cycle continues, as the rights issue was “not about regulatory compliance”.
Roosevelt, during the call noted, “We were already ahead of the game.” He explained that the total capital raise target is $500 million.
“This investment cycle is expected to end by Q3 or Q4 of 2025. Thereafter, we will transition into our consolidation and optimization phase, which will run from 2025 through to 2027,” he noted.
© Businessday
