Access Corporation has intensified its cross-border expansion in order to take advantage of opportunities in Africa, writes Oluchi Chibuzor
Access Corporation recently signed a $300 million intra-African trade facility with Afreximbank in Cairo, Egypt, in line with its strategy to support trade and finance in the continent and also take advantage of the African Continental Free Trade Area (AfCFTA).
Although details of the deal with Afreximbank has not been fully disclosed, the Group Managing Director of Access Corporation, Herbert Wigwe, has not hidden his desire for the institution to tap from the massive opportunities in the continent and also leverage on the benefits of AfCFTA.
Wigwe believes that AfCFTA, among other benefits, would expand intra-Africa trade and provide real opportunities for Africa.
According to him, the plan is for Access Bank, the banking subsidiary of Access Corporation, is to establish its presence in 22 African countries so as to diversify its earnings and take advantage of growth opportunities in the continent.
Africa has enormous potential and there are opportunities for an African bank that is well run, that understands compliance and has the capacity to support trade and the right technology infrastructure to support payments and remittances, without taking incremental risks.
“We believe that we are best positioned to basically do all of that. Our focus is to become an aggregator in Africa and we are building a global payment gateway and providing trade finance support and correspondent banking across the continent. We are focusing on the key markets.
“The approach would always be that in the country we wish to go to, that we have the right skills. We would not just be a drop in the country in which we are present, we would make sure that we have an impactful presence in each of the major countries in which we are present.
“In doing this, we are also mindful of the country we are going to so as to make sure that it is of benefit to the bank. As we do this, we are working with our friends and partners.
“We are diversifying our earnings away from volatile markets as well and we are orchestrating our operations from the global payments gateway and ensuring that using Access Bank UK, providing corresponding services from digital platforms, the overall profitability of our franchise,” he had explained.
Commenting further, on AfCFTA, he said the financial institution would use its digital framework to benefit from the continental agreement.
Access Corporation, under the leadership of Wigwe, recently unveiled its five-year strategic plan, in which it outlined plans to deepen financial services across Africa and extend its services to the continent’s large unbanked population. The five-year strategy document is for 2023 to 2027. Its target is to become one of the top five banks in the continent by 2027.
Wigwe had explained that the institution has consistently followed its five-year strategic plan, which according to him, is responsible for the success it has achieved over the years.
The institution has since transitioned into a holding company (Holdco) with five verticals to capture the opportunities in the African market. They include Access Bank Limited; Hydrogen, which focuses on delivering integrated payments solutions; Oxygen, which focuses on digital and consumer loans; Access Pensions Limited and Access Insurance.
Clearly, Access Corporation has positioned itself to be at the centre of financial flows in the continent. Its six key priorities are retail banking, focus on being digitally led, being customer centric and focused, analytics-driven insights and robust risk management, global collaboration and building a universal payments gateway.
Access Corporation’s target for the next five years would be supported by seven key enablers. These enablers would ensure that Access becomes a top five financial services institution in the continent by the end of the strategic cycle in terms of revenues, asset base and on a balanced scorecard basis.
“The records over the last 20 years show that we have consistently followed our five-year strategic plan and there is no reason to suggest that we would not achieve same by 2027,” Wigwe said.
He stressed that Access Holdings prides itself in the fact that it serves well over 52 million unique customers, which is different from bank accounts. The CEO of the holding company explained that unique customers mean individual accounts.
He also disclosed that Access has over 62 million accounts with presence in over 17 markets worldwide, with network of about 600 branches and over 6,000 professional staff.
By 2027, Access Corporation expects its Nigerian bank to be contributing about 52 per cent of revenues compared to about 82 per cent (nine- month 2022). The new verticals would also be contributing about 12 per cent of total revenues, as revenues from African subsidiaries is expected to double over the next five years.
In addition, Profit Before Tax contributions from Nigeria bank is expected to reduce from about 63 per cent (9M’22) to about 33 per cent, while the new verticals are expected to contribute about 19 per cent of the profitability by 2027, while its African subsidiaries would contribute about 20 per cent as their footprint grows across the continent.
Additionally, by the end of 2027, it expects to have presence in at least 26 countries and in at least three organisations for Economic Co-operation and Development (OECD) countries supporting trade (United Kingdom, France and United States of America). Access also projected that its customer acquisition drive would hit 100 million for the Retail Business by 2027 and would continue as it migrates majority of customers to digital platforms by 2027 across all touchpoints.
According to Wigwe, “Our primary focus on trade is to leverage established presence across trade and financial hubs across the world to continue driving trade outputs. Presence in London, Dubai, Hong Kong, Lebanon, Beijing, Mumbai, etc. and extensive footprint across the continent.
“Today, we have an operation in China, which we are going to convert into a branch because the new ordinance allows us to do that because of our size.
“As part of our desire to position ourselves as Africa’s gateway to the world, we have now basically placed ourselves in the critical trade hubs across the continent and that has helped us as far as a correspondent banking and payment is concerned.
“More than any African bank, we are laying the groundwork for that real growth, linking the entire continent, which I think will see us get to where we want to get to. Until we have more African institutions thinking like us, we would continue to have a situation where they would be treating us like second fiddle from outside.”
He pointed out that the combination of Access Bank and the then Diamond Bank, played a vital role in supporting the growth of the institution.
Speaking further, Wigwe said, “We don’t want to be seen and known as just a dot in any country. So, if you go to countries like Mozambique, we have done further acquisitions. People keep asking: why are you doing all of these? But you need to get to the critical mass before you become profitable. You need to get to the critical mass before you are able to employ the right management, technology and scale, otherwise you cannot compete.
“So, the idea is that if you are going into a country, you make sure that you have the right scale. We built on partnerships, and one of the things you will see is that the contribution from our various subsidiaries is growing and is providing a natural hedge against Nigeria, which has a soft currency as we speak.
“One of the things we want to be known as, is as a global player with an African heritage, and one of the things that mitigate against anybody trying to achieve that is if you are in a soft currency country. We are a growth company and we will continue to invest in our future. So, we would continue to invest in countries that have inflation rate lower than that of Nigeria. What does that mean? It means that in the short-term, we would see elevated cost in terms of technology and people.
“For us, the future is more important. In the next five years, what we have done is to look at Africa first of all as our continent. You have to be strong at home first before you go out and ask ourselves where are the opportunities in the continent, then you ask yourself what is there to be done internationally. Finally, what we then told ourselves is that the world is going through significant shift and changes with respect to technology, demographics.”
He stressed that the bank would continue to take advantage of the huge number of Africa’s unbanked population to drive its retail business, the growing opportunities in trade within the continue due to the Africa Continental Free Trade Area agreement, remittances, cross border trade and digital payment.
Access Corporation is steadily pursuing its ambition of taking banking services to the high unbanked population in the continent.
