Seven months after Access Bank and Diamond bank merged to form the largest bank in Africa by customer-size, Access Bank is set to acquire another bank, but this time, in Kenya. This move will expand the Nigerian lender’s footprint across Africa.
Access Bank received the go-ahead to acquire Transnational Bank Limited after confirmation from Competition Authority of Kenya. The acquisition will see Access Bank takeover 93.57% of Transnational Bank Limited.
Earlier this year, Access Bank and Diamond Bank merged to form a leading Tier 1 Nigerian bank, spanning three continents, 12 countries and 29 million customers.
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Kenya in a merging phase: The acquisition of Kenya’s Transnational Bank Limited by Access Bank follows a series of mergers in the East African nation’s banking industry. The country has recorded merger between NIC Group Plc and Commercial Bank of Africa Limited, and KCB Group Limited’s acquisition of National Bank of Kenya Limited.
Kenya’s Central Bank has been pushing for a merger between the country’s banks because it has more banks per person than South Africa and Nigeria. Kenya has a population of 50 million with about 40 banks. The drive for consolidation had led SBM Holdings Ltd of Mauritius to acquire some of the assets of Chase Bank Kenya Limited and the entire capital of Fidelity Commercial Bank Limited.
With this move by Access Bank, it now has operation in Kenya like its Nigerian competitors, Guaranty Trust Bank Ltd and United Bank of Africa Plc.
What you need to know: Transnational Bank only lends to the agricultural sector. However, its non-performing loans increased by 58% to 1.85 billion shillings, while loans rose 0.5% to 6.63 billion shillings, according to a report. Also, in 2018, Transnational Bank recorded a full-year pretax loss of 98.5 million shillings ($951,690).
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Meanwhile, Access Bank Plc has released its unaudited financial statements for the period ended September 30, 2019 which clearly show positive figures across most financial indicators. The lender recorded a profit of N90.73 billion for the nine-month period of 2019, compared to N62.91 billion recorded at the end of the nine-month period for 2018. This represents a 42.22% increase in profit.
Access Bank generated N210.21 billion in net interest income as at the period ended September 2019. This represents a 70.98% increase compared to the nine months period of 2018 when the lender recorded N122.94 billion.