Tag: Access Bank

Access Bank Plc was the most active stock and the third highest gainer yesterday at the Nigerian equities market as investors sought to lock in into the first tier commercial bank, which consummated its merger with Diamond Bank Plc on Tuesday.

The Nigerian Stock Exchange (NSE) had on Wednesday placed full suspension on Diamond Bank, after the Federal High Court sealed the merger between Access Bank and Diamond Bank on Tuesday. This makes Access Bank, the post-merger entity, the only available vehicle for investors to benefit from the expected synergies from the merger.

Investors rushed in buy orders for Access Bank and turn the stock into a seller’s market in the five-hour trading session yesterday, pushing up the share price and the momentum of activities.

Access Bank was the toast of the investing public with a turnover of 93.47 million shares valued at N638.54 million, representing about 37.4 per cent of total turnover volume yesterday. With more demand than supply, its share price rose by 40 kobo or 6.15 per cent to close at N6.90 per share.

Under the terms of the merger, Diamond Bank will transfer all its assets, liabilities and undertakings to Access Bank and the entire issued share capital of Diamond Bank shall be cancelled and Diamond Bank shall be dissolved without being wound up. In exchange, Diamond Bank’s shareholders shall receive a cash consideration of N1 per share and two ordinary shares of the enlarged Access Bank for every seven ordinary shares of Diamond Bank held as at the effective date.

Access Bank will be the post-merger entity while its Group Managing Director, Herbert Wigwe will continue to lead the post-merger management as chief executive. The business combination is expected to leapfrog post-merger Access Bank as Nigeria’s largest bank by total assets and one of Africa’s largest retail banks.

Meanwhile, share price depreciation suffered by many large-cap stocks dragged the overall market situation to its fourth consecutive negative closing. While there were more gainers than losers, losses suffered by influential stocks such as Dangote Cement, Zenith Bank, Guaranty Trust Bank and Seplat Petroleum Development Company overshadowed the overall market position.

The benchmark index at the NSE, the All Share Index (ASI), declined by 0.50 per cent to close at 30,885.31 points as against its opening index of 31,040.84 points. Aggregate market value of all quoted equities at the NSE dropped by N58 billion from its opening value of N11.576 trillion to close at N11.518 trillion. This depressed the average –year-to-date return to -1.73 per cent.

Sectoral indices showed mixed performance. The NSE Consumer Goods Index rose by 0.13 per cent. The NSE Industrial Goods Index appreciated by 1/13 per cent while the NSE Insurance Index rallied by 0.43 per cent. However, the NSE Oil & Gas Index depreciated by 3.28 per cent while the NSE Banking Index slipped by 0.35 per cent.

There were 24 gainers against 16 losers. Cement Company of Northern Nigeria led the gainers with a gain of N1 to close at N20. PZ Cussons Nigeria followed with a gain of 75 kobo. Eterna rose by 40 kobo to close at N4.80. Custodian Investment added 30 kobo to close at N6.30 while Oando and NASCON Allied Industries chalked up 20 kobo to close at N5.80 and N20.90 respectively.

On the losers’ list, Seplat led the decliners with a drop of N31.60 to close at N550. Dangote Cement followed with a loss of N1.30 to close at N188.10. Guaranty Trust Bank declined by 65 kobo to close at N36.15. Stanbic IBTC Holdings dropped by 50 kobo to close at N45 while Zenith Bank lost 20 kobo to close at N22.

Total turnover stood at 250.03 million shares valued at N2.43 billion in 3,869 deals. Zenith Bank was the second most active stock with 30.75 million shares worth N678.71 million while United Bank for Africa ranked third with 24.59 million shares worth N192.83 million.

Market analysts advised investors to stick to stocks with good fundamentals to minimise the risks in the bearish market.

“We continue to observe sell pressures within the equities market. However, we opine that the mixed performance of the sectors under our coverage presents an evidence of investor bargain hunting on some counters. Tomorrow, the last trading session for the week, we expect to see sustained investor interest in some fundamentally sound stocks which may drive a positive performance for the overall market,” Afrinvest Securities stated.

Analysts at Cordros Capital noted that in the absence of a positive catalyst, investors should trade cautiously in the short term.

“However, stable macroeconomic fundamentals and compelling valuation remain supportive of recovery in the mid-to-long term,” Cordros Capital reiterated.

Access Bank Plc yesterday achieved a landmark with the issuance of a N15 billion green bond, the first corporate green bond to be issued in Africa to be fully certified to have met global climate bonds standard.

The Five-Year Fixed Rate Senior Unsecured N15 billion Green Bond was awarded an Aa- rating by Agusto & Co, the underlying framework verified by PwC (UK) and the bond was certified by the Climate Bonds Initiative as having met the global climate bonds standard.

The offer for the green bonds was achieved by way of a book build which was fully subscribed. The bonds priced at a coupon of 15.5 per cent, with participation from a wide range of asset managers and pension fund administrators.

Group Managing Director, Access Bank Plc, Mr. Herbert Wigwe said the net proceeds from the green bond issue would be directed towards financing new loans and refinancing existing loans in accordance with the bank’s green bond framework.

He added that the fund would also be used to support projects directed at Flood defense, solar generation facilities and agriculture.

“With our pace-setting experience in the mainstreaming of sustainability in our business operations, we are confident that this issue with further help in supporting environmentally friendly investors to meet their investment objectives whilst simultaneously supporting the bank’s customer towards realizing growth opportunities in fast-developing low carbon economy,” Wigwe said.

According to him, Access Bank supports the global climate change mitigation and adaptation agenda and seeks to promote responsible green lending globally. The green bond issuance demonstrates the bank’s commitment to sustainable operational practices.

He noted that as a pioneer operator, both in domestic and international capital markets, Access Bank views the global drive for responsible and sustainable green financing as an opportunity to raise capital for the creation of assets through climate change financing.

“The bank has a strong track record in deploying environmental and social risk management tools, partnering with local and international agencies to deliver a greener outcome from investing activities. Over the last five years, the bank has pioneered various resource conservation programmes in water usage, energy consumption and waste recycling, aimed at reducing carbon emissions,” Wigwe stated.

The bank noted that all its sustainability efforts are well aligned with the Federal Government’s Nationally Determined Contributions (NDCs), the UN Sustainable Development Goals (SDGs), the Economic Recovery and Growth Plan (ERGP) and Vision 2020:20.

The management of the bank noted that the quality of the bank’s contributions to sustainable financial practices is also evident in the increasing local and international awards and accolades received, which include – Karlsruhe Sustainable Finance Award for Outstanding Business Sustainability & Outstanding Sustainability Leader (2018); Euromoney Award for Africa’s Best Bank for Corporate Social Responsibility (2018); Global Finance Awards for Most Sustainable Bank in Nigeria (2018) and Central Bank of Nigeria Sustainability Award(s) for Sustainable Bank of the Year (2017).

The management of Access Bank had, in anticipation of the issuance, launched the Nigerian Green Bond Market Development Programme in June 2018, in partnership with FMDQ OTC Securities Exchange and the Securities and Exchange Commission (SEC).

Access Bank Plc recorded significant growth in profitability in 2018 as the first-tier commercial banking group rode on the back of improved operating efficiency and risk management to cross the N100 billion profit mark.

Key extracts of the audited report and accounts of Access Bank for the year ended December 31, 2018 released at the weekend showed that the bank grew pre and post tax profits by 32 per cent and 58 per cent. Gross earnings had risen by 15 per cent. Total assets increased by 21 per cent while customers’ deposit grew by 14 per cent.

The board of the bank has recommended payment of a final dividend per share of 25 kobo to shareholders, bringing the total dividend pr share for the 2018 business year to 50 kobo. The bank had paid an interim dividend of 25 kobo per share.

The report indicated that gross earnings rose to N528.7 billion in 2018 compared with N459.1billion in 2017. Interest and non-interest incomes contributed 72 per cent and 26 per cent respectively to the top-line. Profit before tax rose from N78.2 billion to N103.2 billion while profit after tax increased to N95.0 billion in 2018 as against N60.1 billion in 2017. With these, earnings per share rose from N2.11 in 2017 to N3.31 in 2018. Return on average equity (ROAE) stood at 19.0 per cent while return on asset closed 2018 at 2.1 per cent.

The bank’s balance sheet remained strong and diversified with total assets rising to N4.95 trillion in 2018 as against N4.10 trillion in 2017. Loans and advances increased from N2.06 trillion to N2.14 trillion. Customer’s deposits improved to N2.57 trillion from N2.25 trillion. Capital adequacy ratio (CAR) remained adequate at 20.8 per cent, taking into consideration the regulatory transitional arrangement of IFRS 9 implementation. On a full impact basis, CAR stood at 19.9 per cent. Also, Liquidity ratios improved from 47.2 per cent to 50.9 per cent, well above regulatory requirements.

Group Managing Director, Access Bank Plc, Mr. Herbert Wigwe said the banking group made significant progress in 2018 despite the challenges in the operating environment.

According to him, the bank made solid progress throughout 2018 in line with its 2018-2022 five-year strategy, and it remains committed to the achievement of its strategic imperatives going forward.

He assured that the banking group will continue to invest in its people and technology in order to improve operational efficiency and service touch points with earnings growth in 2019.

He pointed out that the contribution of the bank’s subsidiaries to group profits grew by 116 per cent to N27.9 billion, due to effective implementation of overall strategy.

“In pursuit of our vision to be one of the leading banks in Nigeria, we took accelerated strides in the last quarter of the year towards achieving our overall retail strategy. The merger with Diamond Bank will enable us to fully entrench ourselves in the retail market with a view to lowering our funding cost. This transaction is anticipated to be completed by April 2019, resulting in the creation of an enlarged, efficient and digitally led tier 1 retail banking franchise,” Wigwe said.

Shareholders of Access Bank and Diamond Bank recently approved the merger between the two commercial banks, in a transaction that will leapfrog post-merger Access Bank as Nigeria’s largest bank by total assets and one of Africa’s largest retail banks.

At separate court-ordered meeting in Lagos, shareholders overwhelmingly approved the scheme of merger for the business combination and authorised the directors of the banks to take such actions as may be necessary to give effect to the scheme including listing of the scheme shares on the Nigerian Stock Exchange (NSE).

Under the terms of the merger, Diamond Bank will transfer all its assets, liabilities and undertakings to Access Bank and the entire issued share capital of Diamond Bank shall be cancelled and Diamond Bank shall be dissolved without being wound up. In exchange, Diamond Bank’s shareholders shall receive a cash consideration of N1 per share and two ordinary shares of the enlarged Access Bank for every seven ordinary shares of Diamond Bank held as at the effective date.

Directors and management of the banks said the merger will create significant values for all stakeholders, underlining the inherent synergies and value accretion in the business combination.

The business combination is expected to form a leading Tier 1 Nigerian bank and the largest bank in Africa by number of customers, spanning three continents, 12 countries, 3,100 Automated Teller Machine (ATM), more than 33,000 Point of Sales (PoS) terminals, 27 million clients and more than 10 million mobile customers. Access Bank will be the post-merger entity while its Managing Director, Herbert Wigwe will continue to lead the post-merger management as chief executive.

Diamond Bank and Access Bank share many of the same areas of focus, including women, youths, entrepreneurs and the financially excluded.