Home Business News Access Bank forgoes N75 billion rights issue

Access Bank forgoes N75 billion rights issue


Tier one lender Access Bank Plc yesterday held a conference call  to update analysts and investors on progress with its merger and other sundry issues. Here are highlights of the call.

Revised time table of the merger  

The Access Bank CEO provided a revised time table of the merger. Court ordered meetings are expected to hold in March. Access Bank has scheduled its court-ordered meeting for the 5th of March, 2019.

The expected time of completion of all necessary processes is April 2019. This is however subject to shareholder and regulatory approval.

Equity raise shelved 

A N75 billion rights issue announced by the bank this year has been shelved.

Group Managing Director of the bank Herbert Wigwe, said the bank took the decision because the bank had a clearer understanding of the capital strength required. It will, however, drawdown on US$250 million of 5-year tier II capital in Q1 2019.

Estimated synergies 

Wigwe also stated that the bank estimates N150 billion in cost synergies will be created over the next three years. On the cost side, synergies would amount to N88.1 billion, while on the revenue side synergies would amount to N62.2 billion.

57  branches to go  

Wigwe also stated that the bank would shut down 57 branches over the next two years. There would however be no staff redundancy, as affected staff would be retrained. The affected branches were arrived at after deep customer analytics.

To seek forbearance from CBN 

Wigwe also confirmed that the bank will seek forbearance from the Central Bank of Nigeria pertaining to writing off loans.

Clarity on subsidy backed loans 

In response to a question by Ola Warikoru an analyst with SBG Securities pertaining to the banks waiving off interest on subsidy-related loans, Wigwe clarified the actual request made by the CBN.

The apex bank asked banks to waive the interest for one year on subsidy backed loans.

Further 9Mobile provisions unlikely  

In response to a question from Glori Fadipe of CSL Stockbrokers, Wigwe stated that the need for provisions pertaining to loans granted to 9Mobile was highly unlikely. The bank he noted, had made the highest provisions with respect to the loans granted the telco.

 No form of integration has taken place 

Victor Etuokwu, the Access Bank lead for the integration process stated that no cross-functional activity had taken place. The interoperability of ATM cards across both branches was something that could be pursued by any bank.




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