In an ambitious move to support its expansion and align with central bank capital requirements, Access Bank Plc is exploring the issuance of dollar-denominated securities within Nigeria’s domestic market, reports Bloomberg.
The bank’s Managing Director, Roosevelt Ogbonna, announced the planned sale of these securities during a briefing in Lagos, Nigeria’s commercial hub. Ogbonna disclosed that the bank will issue two tranches, though specific amounts to be raised are yet to be finalized.
According to Ogbonna, one tranche will be dedicated to financial institutions development (DFIs), with the other being offered on the open market. While details of the structure are still being worked out, the tranche aimed at DFIs is expected to be completed by the first half of next year. The bank plans to use the Nigerian government’s recent domestic dollar-denominated bond sale as a benchmark for its offering.
Earlier this year, the Nigerian government issued its inaugural domestic dollar-denominated bond, attracting over $900 million in subscriptions, a landmark achievement that underscored the appetite for dollar securities within Nigeria’s borders. The $500 million bond, which was managed by the Africa Finance Corporation (AFC), offered a 9.75% annual coupon rate and achieved a 180% subscription rate. The Ministry of Finance celebrated the bond’s issuance, pointing out that it represents Nigeria’s leadership in financial innovation in Africa.
This pioneering issuance offers Access Bank a valuable reference point as it seeks to bolster its funding through dollar instruments. Ogbonna highlighted that tapping into the dollar-denominated domestic market is a strategic step that aligns with the bank’s aggressive growth trajectory while ensuring regulatory compliance.
Access Bank’s growth plans extend far beyond Nigeria, with expansion strategies set to take it across continents. Ogbonna shared that Access Bank Plc intends to establish a presence in the United States by 2025, or no later than 2026. Additionally, Access Bank’s UK subsidiary will open an office in Hong Kong, a move that aligns with its aggressive approach to establishing a global footprint.
Known for its dynamic acquisition strategy, Access Bank has been actively pursuing growth through mergers and acquisitions across Africa. This year, the bank entered a binding agreement with Kenya’s KCB Group Plc to acquire the entire issued share capital of National Bank of Kenya Limited, further strengthening its presence in East Africa.
Access Bank’s commitment to expanding its influence in Africa was also underscored by its recent acquisition of a provisional license to establish a banking subsidiary in Namibia. Ogbonna described this expansion as a strategic effort to enhance intra-African trade and create a robust network in Southern Africa, reinforcing Access Bank’s position as a key player in the region’s banking sector. This move into Namibia follows the bank’s established expansion model, marked by carefully selected acquisitions and partnerships across African nations.
Balancing Growth with Capital Compliance
While Access Bank has already concluded a N351 billion Rights Issue in August, its pursuit of dollar-denominated securities shows the bank’s commitment to maintaining a strong capital base to support its bold growth agenda. These steps are designed to align with regulatory capital requirements, ensuring that the bank remains resilient as it navigates expansion across Africa and into new global territories.
In a challenging economic climate, Access Bank’s innovative approach to capital markets, combined with its expansion strategy, could position it as a pioneering force in both African and global financial sectors. With its plans spanning Africa, the U.S., and Asia, Access Bank is on a path to cementing its place as a leading African bank with a strong global footprint. The successful issuance of dollar-denominated bonds could be a critical factor in fueling this journey.
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