(Bloomberg) — Access Bank Plc, a Nigerian lender with operations in 16 countries, plans to strengthen operations in nations with stronger currencies to stabilize earnings in its home market.
The lender targets deepening its services in the U.K., South Africa, Botswana, Kenya and Ghana to lead growth among the subsidiaries owing to either the size of the economies or strength of their currencies, Chief Executive Officer Herbert Wigwe said at an investor call in Lagos, the nation’s commercial hub.
“As the U.K. expands, you may find more than 20% of our revenues coming from better currency, and some stronger currency countries that basically ensure our business is sustainable,” Wigwe said.
The naira, the local currency in Access bank’s home market, has been under pressure, losing more than 50% of its value since 2015 after Nigeria plunged and recovered from two economic contractions in the period.
The biggest bank by assets in Africa’s largest economy plans to double the share of assets outside its home market by 2027 to between 30% and 35% from 15%, Seyi Kumapayi, executive director for African subsidiaries said at the same investor call. The contribution of the foreign subsidiaries to pre-tax profit will probably remain at about 38%, Kumapayi said.
Foreign asset growth will be boosted by further expansion to six new markets namely France, Hong Kong, Malta, Senegal, Cote d’Ivoire and Cameroon, according to an emailed presentation. The bank’s total assets grew 35% to 11.7 trillion naira ($27.9 billion) in 2021 compared to the previous year while pre-tax profit rose 40% to 177 billion naira, it said.
The Lagos-based bank has executed a series of acquisitions spanning East and West Africa since 2020 and plans to transition to a holding financial institution this year.
It forecasts loan growth “to be closer to 10%,” this year with most lending targeting Nigeria and foreign markets with stable currencies. Return on equity is forecast to grow by more than 20% from 17.8%.
