Access Bank to exit non-core banking business

Access Bank to exit non-core banking business

 

 

April 1, 2011 by ANTHONY OSAE-BROWN
Access Bank, in its 2010 financial statement released recently, said it plans to exit all its non-core business. Giving details of the plan, the bank disclosed that it is “in compliance with the Central Bank of Nigeria’s (CBN) ‘Regulation on the Scope of Banking Activities’, issued September 7, 2010, which requires that every bank divest from all non-banking businesses and apply for a new type of banking licence.”
The annual report states that the bank’s board met and approved that it should apply for an International Commercial Banking licence and “by this, the bank shall maintain a minimum paid up share capital of N50 billion as required by the new CBN Regulation No 01, 2010 on the Scope, Conditions and Minimum Standards for Commercial Banks.”
Based on the information gathered from Access Bank’s annual report, the bank has three subsidiaries which are: United Securities Limited, Access Investment and Securities Limited and Access Homes and Mortgages Limited.
Access Bank plans to sell United Securities Limited as a going concern to an acceptable core investor. However, the bank’s board has decided that Access Investment and Securities Limited would “undergo members’ voluntary winding up except a willing buyer is found before the conclusion of the winding up process; while the bank will integrate the operations of Access Homes and Mortgages Limited into its own operations, and the assets and liabilities of the company will be transferred to the bank.
Access Bank’s annual report explains that “United Securities Limited is a wholly owned subsidiary of Access Bank plc, a Securities and Exchange Commission (SEC) licensed provider of securities register and data administration services. The company was acquired by the bank in 2008 and currently has an authorised share capital of N50 million.  Further information from the annual report shows that United Securities has total assets of N6.09 billion and net assets of N467 million.
Access Investment and Securities Limited is also a wholly owned subsidiary of Access Bank plc, and is the investment management subsidiary of the bank. The company commenced operation in 2008 and currently has an authorised share capital N500 million. The company has total assets of N605 million and net assets of N529 million.
Access Homes and Mortgages Limited, a wholly owned subsidiary of Access Bank plc, was incorporated in 2008 and licensed by the CBN to carry on mortgage banking business in January 2009, with an authorised share capital of N1 billion.
It would be recalled that Access Bank also released a press statement on Monday confirming its acquisition of Intercontinental Bank plc. The statement, titled ‘Access Bank plc and Intercontinental Bank plc announce proposed business combination’ goes on to say that both banks “have signed a Mermorandum of Understanding (MOU) for the purpose of business combination of both institutions, which will result in the emergence of one of Africa’s largest financial institutions.”
In an investor presentation by Access Bank on its 2010 full-year results, a slide titled ‘Snapshot of Inorganic Growth Opportunities’, the bank, without giving the name of its proposed acquisition target, showed the potential size of the merger. Access Bank states that the proposed acquisition, without giving specific monetary values, will make it the fifth largest bank in loans and advances in Nigeria, fourth largest bank in deposits, gross earnings and number of customers and third largest bank in the number of branches.
Source: Businessday

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