Good times are here for Access Bank Plc’s customers, as they would now enjoy services beyond banking with the soon-to-be-birthed Access Holdings Plc. Access Bank HoldCo would present to them over time new financial services beyond banking.
After prioritizing its core banking services for some years, Access bank Plc has opted to restructure and diversify its revenue base, by adopting the holding company structure. With this, the bank remains competitive with other financial services. Over the years, Access Bank Plc, has proven to be Nigeria’s biggest lender by customer base and total assets.
This brand new transition to a HoldCo structure by the bank has raised the stake and increased the number of banks with HoldCo structures. With this, key watchers in the financial sector say, Nigerian banks are gradually and technically reversing to the universal banking model, which was prohibited a decade ago due to undue abuse.
A Financial expert, (Names withheld) said, “As it stands, the HoldCo structure seems to be a sit-tight model being adopted by Nigerian banks’ leadership, as management and board seek to retain full control”.
At the end of its recent court-ordered meeting, the bank opted to adopt the name Access Holding Plc, thus implying that shareholders of Access Bank Plc would be issued new shares of Access Holdings Plc, as the former would be delisted from the Premium Board and replaced by the latter.Well, for clarity sake, holding companies are actually not new in the banking sector of Nigeria. According to information, it dates back to 2011 when the Central Bank of Nigeria (CBN) forced banks to give up their non-banking businesses or restructure into a holding structure. The regulator, like its peers globally, believed that it was an important risk management strategy to separate lenders from entangling with other financial services like insurance or investments.Following that regulation in 2011, several banks – UBA Group, First City Monument Bank (FCMB), Stanbic IBTC Bank and FirstBank – adopted the holding company structure. Also, GTBank and Sterling Bank have either secured or are in the process of securing regulatory approvals for their (HoldCos). There are some indirect benefits in terms of the opportunity for the HoldCo to invest and give shareholders exposure to non-banking activities.At Access Bank, the HoldCo structure supports its international expansion plans. According to information available, the non-operating holding company will in the immediate include two broad areas: Access Bank Nigeria, and its non-banking subsidiaries. Justifying the new giant step, the Bank’s CEO, Herbert Wigwe, said to an international journal in March, “We want to be present in 22 countries over the next five years, and the idea is to be present in the large trade corridors of the continent.”Herbert Wigwe has proven that he knows his onions in the financial world, as he has played critical roles at the bank. His roles have earned Access Bank an array of awards; In 2016, it won Bank of the Year and CEO of the Year at the BusinessDay Banking awards in Lagos.
Mr. Wigwe started his professional career with Coopers & Lybrand Associates, an international firm of Chartered Accountants. He spent over 10 years at Guaranty Trust Bank Plc where he managed several portfolios, including financial institutions, large corporates and multinationals. He left Guaranty Trust Bank as an Executive Director to co-lead the transformation of Access Bank Plc in March 2002 as Deputy Managing Director. He was appointed Group Managing Director/CEO effective January 1, 2014.According to the Bank, Mr Wigwe is the Chairman of the Access Bank (UK) Ltd and a Non-Executive Director of Nigerian Mortgage Refinance Company Plc; FMDQ OTC Securities Exchange; Shared Agents Network Expansion Facilities Ltd and Agri-Business/ SME Enterprises Investment Scheme. He also sits on the Boards of CACOVID-19 LTD/GTE, HIV Trust Fund of Nigeria and the Nigerian Business Coalition Against Aids. This new feather to his cap is unprecedented. Apart from bringing an additional layer of operating cost, with little or no direct revenue benefits, the new HoldCo will guarantee the bank’s expansion to countries like South Africa, Kenya, Mozambique, Angola and some francophone countries.Allaying the teeming customers’ fears, Wigwe assured that Access Bank Nigeria will continue to hold investments in its core-banking subsidiaries outside Nigeria whilst the non-banking arm will hold direct and indirect equity interest in entities such as Access Insurance Brokers Ltd, The Payment Services Company Ltd and Grow Microfinance Ltd. Stakeholders have commended the Herbert Wigwe led Executives of Access Bank. They believe this new stride gives the bank an opportunity to consolidate non-banking interests, especially as Nigerian banks may be back to the size competition.
It also offers the Bank’s customers an expanded scope of services, even as the bank may now offer a full range of services to its growing customer base. Interestingly, customers are in for good times, as they could now enjoy services beyond just banking.
Olamide Adeniji is a member of the editorial team of TheScript Newspaper
