The scramble for Africa’s financial sector has witnessed a shift since the lockdown as more African financial powerhouses are strengthening their regional base by acquisition as an expansion strategy instead of mergers. This played out again with the recent acquisition of Mozambique’s African Banking Corporation by Access Bank Plc, one of Nigeria’s biggest banking institutions. Access Bank hopes to use the acquisition of the ABC to consolidate its operations in Mozambique into a single financial services unit, and hope that gaining new grounds will add bigger value to miles already covered after acquiring another banking asset in the Southern African region.
The deal was sealed by Access Bank Mozambique with the backing of London-listed financial services group Atlas Mara Limited. Access Bank has been working on expanding its non Nigerian market beyond its present level especially with more footholds in the SADC region. This acquisition comes after two other acquisitions in Zambia and South Africa so far delivered between the start of the year and now, and another one to be completed in Botswana by June.
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An already cluttered market in its base, Nigeria, is pushing the country’s biggest bank by asset to seek growth in the rest of Africa at a time when the coronavirus crisis has grievously deteriorated credit quality and lenders still battle the headwinds of last year’s record crash in the prices of oil on earnings. Oil and gas contributes the bulk of the credit base of Nigerian banks.
With the Mozambican takeover, the bank’s combined assets from a proposed merger between Access Bank Mozambique S.A and the new acquisition will make it the seventh largest bank in the country.
“We are building the scale necessary to compete effectively and efficiently in key African markets outside Nigeria and ensure we sustainably deliver strong return on invested capital in our African expansion,” says the Group Managing Director, CEO of Access Bank, Mr Wigwe.
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“Scale is an important contributor to returns and this transaction is consistent with our rigorous efforts to create to create a strong presence with scale across Africa.”
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