Access Bank Makes Expansion Statement With Takeover of South Africa’s Grobank

Access Bank has been on acquisition spree in line with its expansion drive to become a truly pan-African financial powerhouse in the quest to tap into the opportunities provided by the Africa Continental Free Trade Agreement (AfCTA) by acquiring its third banking assets in eight months, having taken over Kenya’s Transnational Bank in July and Zambia-based Cavmont Bank in January. A statement from Access Bank said that it has paid about $60 million to purchase a controlling interest in South Africa’s 74-year-old Grobank, signaling the culmination of its aspiration to foray into Africa’s most industrialised nation and tap its market.

Access Bank Managing Director Herbert Wigwe
Access Bank Managing Director Herbert Wigwe

The move makes it Nigeria’s first bank to venture into South Africa ploughing in both equity and debt in Grobank as part of the grand plan to explore trade banking deals on its way to becoming “Africa’s Gateway to the World”, Managing Director Herbert Wigwe was recently quoted as saying.

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It will open up the means to widen trade finance capacity in Grobank, which is presently increasing its attention on the country’s agriculture industry. No mention was made of the precise stake size but the lender said in a note in September “the first is an initial cash consideration for a 49 per cent shareholding, increasing to a majority stake in the second tranche”.

Banks in Nigeria are stepping up efforts to create new ways of bolstering earnings beyond its shores as a buffer to an economic downturn that has triggered a fall in government bond yields and accelerated the incidence of restructured loans, helped by the pandemic.

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“We have a full retail banking licence in South Africa. We will pursue a wholesale banking franchise. We will pursue trade finance,” Mr Wigwe said.

The South African acquisition is its third in eight months, having taken over Kenya’s Transnational Bank in July and Zambia-based Cavmont Bank in January. It hopes to leverage the African Continental Free Trade Area agreement to enter Morocco, Algeria, Egypt, Ivory Coast, Senegal, Angola, Namibia and Ethiopia.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry