The expansion of Access Bank’s operations, in recent times, has been phenomenal. For a bank, which is not given to frivolity, but has penchant for excellence, it is therefore not surprising that, it has, before long, imprinted its indelible marks with its products and services in many countries of Africa and gaining traction in climes outside the continent, writes Kunle Aderinokun
The growth of emerging market economies has been interesting to watch. Even more exciting are ways that institutions in already developed markets are positioning themselves to benefit from these growing markets. Most notable of these efforts revolve around the steady and deliberate expansion of banks.
Many Nigerian banks are looking to surge into both developing and developed markets, following the trend of customer migration into new and emerging markets. Over the last few decades, banks have taken different approaches to extend their reach locally and globally. Some banks have taken a liking to regional expansion, leveraging the interactions that the proximity to their home countries allow them. On the other hand, select banks have gone cross-border, establishing a presence in countries thousands of miles from their headquarters.
Access Bank has been one of the banks that have led the banking expansion trail in Nigeria, intensifying domestic and international operations by increasing branch networks in its domestic market and instituting subsidiaries abroad. The cross-border expansion was feasible as a result of the growing number of banks in the emerging markets looking to either acquire another bank or be acquired. At the end of 2012, Access Bank was successfully operating in 10 countries outside of Nigeria – Burundi, Côte d’Ivoire, Democratic Republic of Congo, Gambia, Ghana, Rwanda, Sierra Leone, Zambia, UK, and China.
The expansion didn’t stop there, as in the past six years, the Bank opened more physical branches and became fully operational in fourteen countries – adding UAE, India, Lebanon, Cameroon, and Kenya. This therefore placed the bank strongly in some of the world’s key financial centers.
In 2018, Access Bank launched its ‘Africa’s Gateway to the World’ campaign – the bank’s strategic initiative, which aims to promote ‘access to finance’ in Africa and globally.
An ambitious project? Maybe for some. Access Bank started this campaign on a high by leveraging technology to offer its consumers new products. A good example is its partnership with Remita, which has offered PayDay loans to over five million external customers. The product was available on the web, through the bank’s USSD code, via ATMs, Access Mobile, WhatsApp Banking, and QuickBucks – its instant loan disbursal application.
In 2019, Access Bank merged with Diamond Bank as part of its five-year strategic plan for continental expansion.
The merger was driven by the need to combine the unique strength of the two institutions to produce a financial powerhouse, and the desire to guarantee customer satisfaction. Almost a year later, we can say the bank has successfully achieved a considerable percentage of its goals – a financial powerhouse spanning three continents, 12 countries, and over 45 million customers.
Staying true to their goal of becoming Africa’s gateway to the world, Access Bank started the year 2020 with a big announcement, acquiring majority stake in Kenya-based Transnational Bank (TNB). Through this, the bank plans to build on TNB’s existing expertise in agricultural financing while leveraging its resources to improve TNB’s other business segments. Notwithstanding the bank’s remarkable growth thus far, Access Bank’s Group Managing Director, Mr. Herbert Wigwe, has also shared his plans to open operations in four additional African countries within the year.
The growth of e-banking start-ups and solutions has proven to be incredibly beneficial for the Nigerian economy. Given that these digital innovations provide much-needed solutions to a number of issues customers of the traditional banking systems have hitherto experienced, there has been an unmistakably positive effect across various sectors.
As an established leader in the Nigerian and indeed African banking industries, Access Bank has embraced digital technology to propel both its sustainability targets and its African gateway strategic drive. This is evident in the bank’s partnership with the Africa Fintech Foundry (AFF), aimed at nurturing the next generation of cutting-edge financial-technology firms. The AFF is a pan-African accelerator designed to find and invest in start-ups that implement a global viewpoint while still focusing product offerings on Africa. Access Bank plans to harness the very best Nigeria has to offer, working closely with them to make Nigeria a retail banking powerhouse.
Over the last couple of years, Access Bank has focused its expansion efforts on powering digital payments across Africa. The bank launched its AccessAfrica product, a payment system that serves to facilitate cross-border trade and non-trade payments. This product simplifies Person-to-Person (P2P), Business-to-Business (B2B), Person to Business (P2B), Government to Person (G2P) payments and optimises its transactions. With AccessAfrica, both account holders and non-holders can make transfers effectively and efficiently, enabling millions of people to make school fees payments, merchant payments, e-commerce payments, trade payments, and remittance payments, to name a few. Presently, AccessAfrica stands as one of the best low-cost and secure payment options for instant intra-Africa transactions, even allowing users to send and receive funds in USD or LCY.
In addition, Access Bank has digitised a significant number of its back-office processes and functions with a business process management solution, and is working towards becoming a 100-per cent-paperless organisation. This allows for more seamless operations across all the bank’s branches globally.
Benefits of Expansion
Probably the first and most important benefit of Access Bank’s expansion is the rate at which the bank has been able to scale – growing its customer base with unprecedented ease. This has made it easier for it to secure a broader geographic footprint across Africa and the rest of the world.
Access Bank, since its merger with Diamond Bank, has been able to administer its core operational infrastructure more efficiently. This means customers have better access to most of the Bank’s product offerings, including DiamondXtra, Payday Loan, QuickBucks, the Device Finance Scheme, and its USSD channel.
Nine months after the Access-Diamond merger was completed, Access Bank posted gross earnings of N513 billion, showing an increase of 37 per cent above the N375.2 billion recorded within the same time frame in 2018. Interest and non-interest income contributed 79 per cent and 21 per cent respectively to the earnings, and net impairment charges stood at N10.61 billion, up from N8.353 billion in 2018. Further analysis of the results showed the bank’s asset base remained strong and diversified, growing by 33 per cent to N6.6 trillion as of September 2019, up from N4.95 trillion as of December 31, 2018. Meanwhile, customers’ deposits soared by 65 per cent to N4.2 trillion from N2.57 trillion the previous year.
Outside of the bank’s exceptional numbers, many studies show that expansion and adoption of new technologies can directly result in greater productivity, greater competitiveness, and profitability. In turn, this results in the creation of more, and better jobs. As stated previously, expansion and digitisation create a positive ripple effect across various sectors translating into growth in the agricultural, financial, tourism and manufacturing sectors, and a steady reduction in poverty.
Taking all this into consideration, it is clear to see how beneficial expansion – especially through mergers and acquisitions – is to the banks and the nation’s economy. Access Bank’s performance post its last merger was considerably better than the performance of either bank prior, allowing it to do more for its stakeholders, and reinforcing its case for a sustainable business model.