Benefits of Access Holdings’ Rights Issue for Investors

Breakdown of the Rights Issue

With the rights issue, Access Holdings will increase its issued share capital from N17,772,612,811.00, which is divided into 35,545,225,622 ordinary shares, to N26,658,919,216.50.

This expansion will be made possible by the creation of an additional 17,772,612,811 ordinary shares, each priced at N0.50 kobo, which will rank equally with the company’s existing shares. Existing shareholders are entitled to purchase one ordinary share for every two existing shares they hold.

The recapitalization plan set by the CBN requires a minimum capital of N500 billion, N200 billion, and N50 billion for commercial banks with international, national, and regional licenses, respectively.

Similarly, the CBN has raised the capitalization baseline for Merchant Banks (N50 billion) and Non-Interest Banks (National: N20 billion and Regional: N10 billion).

Options available to banks for raising capital include private placements, which allow lenders to seek new funds from selected private investors, and rights issues, which allow them to invite existing shareholders to purchase additional shares at a discounted price relative to the current market value, among other methods.

Shareholders Support Access Holdings Rights Issue

Various shareholder groups have expressed their optimism regarding the ongoing rights issue by Access Holdings Plc.

They view Access Holdings as a forward-thinking financial institution with strong leadership and excellent customer service, capable of driving growth and profitability.

Shareholders believe that the ongoing capital raising exercise will lead to significant operational growth and create higher value for all shareholders.

They highlighted Access Holdings’ track record as Nigeria’s most profitable lender, noting that the additional capital would enhance the bank’s output.

Shareholders describe Access Holdings as a reputable financial institution that has consistently delivered good returns to its investors. They are confident that the bank will continue its trajectory of success and maintain strong returns for shareholders.

Chief Sunny Nwosu, founder and former National Coordinator of the Independent Shareholders Association of Nigeria (ISAN) advised Access Holdings to continue meeting the expectations of shareholders and stakeholders through quality service delivery and good returns on investment.

He predicted that the rights issue would be oversubscribed, given the bank’s performance and its history of meeting targets.

Nwosu stated that Access Holdings remains a solid institution that has consistently exceeded shareholders’ expectations and possesses the capacity to continue thriving.

“I do not think that Access Holdings will disappoint investors. They have consistently delivered and exceeded investors’ expectations, and this current offer will not be an exception,” he said.

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He forecasted that Access Holdings’ shares would appreciate significantly, providing investors with substantial returns both now and in the future.

Nwosu also expressed confidence that investor trust will remain strong, as the institution’s track record ensures acceptance and investment whenever it seeks to raise new funds.

Bisi Bakare, the National Coordinator of the Pragmatic Shareholders Association of Nigeria (PSAN), stated that Access Holdings has what it takes to attract the right investors, and is already doing so effectively.

She emphasized the bank’s consistent dividend payments and strong financial performance, making it an attractive investment.

Bakare expressed her association’s support for the rights issue and predicted that it would be oversubscribed by the end of the offer period.

She mentioned that members of her association have been encouraged to take up their rights, given the bank’s proven ability to generate profits and declare dividends.

“I am going to take my rights, and we have advised other shareholders to do so. Investors should also see the opportunities the offer presents, based on the track record of success that is synonymous with Access Holdings. The Rights Issue is very good, and attractive to savvy investors,” she said.

Taiwo Oderinde, a member of the Proactive Shareholders Association, praised Access Holdings for adding value to the economy and investors.

He noted how the company has exceeded expectations by growing from humble beginnings to becoming a global brand.

He encouraged investors to take advantage of the rights issue, suggesting that those who do will see significant gains in the future. “I predict great returns to investors in the rights issue,” he said.

Boniface Okezie, National Coordinator of the Progressive Shareholders Association of Nigeria (PSAN), remarked that Access Holdings’ expansion into new markets is now poised to yield positive results, offering good opportunities for investors across the board.

He advised the bank to continue equipping its branches domestically and internationally with the latest technology to ensure ongoing quality service delivery and strong returns for shareholders and stakeholders.

Okezie highlighted that investors are participating at the right time, as the years of expansion and new market openings will start to deliver substantial results.

He also suggested that the subsidiaries within the holding company should be strengthened to ensure they remain profitable.

Okezie encouraged Access Holdings to show greater interest in funding the real sector to support economic growth and sustain business expansion.

“Overall, Access Holdings is a great brand that has stood the test of time. Its ability to deliver to customers and stakeholders is unquestionable, and we believe that its track record of great achievements will be sustained,” he said.

He further recommended that the bank continue to hire top talent and maintain a strong reward system to motivate the workforce to exceed targets and deliver excellent returns to shareholders.

The Chairman of Access Holdings Plc, Aigboje Aig-Imoukhuede, emphasized that the decision to initiate a rights issue is a demonstration of the group’s commitment to its shareholders. He highlighted that shareholder value is at the core of the group’s business vision, and those who have supported the group’s growth to its current stature should reap the benefits.

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During the “Facts Behind the Rights Issue” session at the Nigerian Exchange (NGX), Aig-Imoukhuede explained that the group is entering a new phase of growth, where shareholders can expect substantial returns on their investments. He encouraged shareholders to take up their rights, as this would allow them to gain more from their investments.

He noted that the additional capital raised through the rights issue will enable the group to seize emerging opportunities and deliver long-term value to its shareholders. The group remains committed to strengthening its ties with shareholders and enhancing value creation.

Commitment to Infrastructure Funding

Access Holdings Plc has reaffirmed its commitment to addressing infrastructure deficits and improving access to capital, not only in Nigeria but across the continent.

Roosevelt Ogbonna, Managing Director of Access Bank Plc, stated that the bank’s focus on improving infrastructure is driven by a desire to bridge the gap and better connect Africa with the global market.

“As one of the continent’s largest and most diversified financial services groups, the Group is poised to tackle Africa’s integration into global markets, which remains a significant challenge, hindering the continent’s economic growth and development, particularly in an era where globalization is rapidly reshaping economies worldwide,” Ogbonna said.

Speaking during the Rights Issue presentation at the Nigerian Exchange (NGX), Ogbonna stated, “We are positioning ourselves to be one of the most respected banks globally,” and added, “Our focus is on superior service across all the continents and countries we operate in.”

Ambitious Growth Plan

Ogbonna revealed that Access Bank’s customer base is projected to grow to 125 million by 2027, further solidifying its market leadership.

This growth is part of a broader strategy that includes driving organic growth through strategic acquisitions, partnerships with international banks, and significant investments in infrastructure and technology.

Access Holdings’ ambitious five-year strategic plan aims to establish a presence in at least 26 countries by 2027, including key markets in the Organisation for Economic Co-operation and Development (OECD) countries, such as the United Kingdom, France, and the USA.

To support this growth, Ogbonna explained that Access Holdings plans to develop a cutting-edge digital platform and automated self-services to better serve its customers, as well as open cost-effective branches in strategic locations both within and beyond Africa.

Strategic Partnerships and Market Expansion

As part of its growth strategy, Access Holdings is forming strategic partnerships with major players in the financial sector. One such partnership is with Safaricom Plc and M-PESA Africa, aimed at expanding cross-border money solutions in Africa.

This partnership will leverage Access Bank’s extensive network across 15 African countries, including Nigeria, Kenya, Ghana, and Tanzania, to offer affordable remittance solutions in key markets.

Additionally, Access Holdings is collaborating with MasterCard to create a payment infrastructure that integrates a single cross-border money transfer system across multiple African markets.

This solution will enable businesses and consumers to make and receive international payments in over 150 countries, enhancing the accessibility and efficiency of cross-border transactions.

Ogbonna emphasized that Access Holdings’ strategic expansion plan has the potential to position Africa as a global economic leader by expanding financial and credit services to remote areas of the continent.

He highlighted the vast opportunities for African integration and economic progress, noting that Access Holdings is well-equipped to unlock new opportunities for African businesses and consumers, thereby enhancing the continent’s interconnectedness.

Positioning as Africa’s Gateway to the World

Ogbonna noted that Access Bank has experienced significant growth, particularly after its merger with Diamond Bank, which has positioned it as one of the largest retail banks in Africa by customer base and the largest by total assets.

The bank serves its markets through Retail, Business, Commercial, and corporate services, and over the past 18 years, it has demonstrated strong growth potential, solidifying its position as a leader in African banking.

The goal of becoming Africa’s gateway to the world is driven by Access Holdings’ plan to be the continent’s preferred trade financier and payment solutions provider.

This strategy capitalizes on the immense potential in trade and payment, including Africa’s $24 billion electronic payments market, which is growing at an annual rate of 30%, the $950 billion in cross-border trade, and $100 billion in cross-border payments and remittances.