No mention has been made of the value of the transaction yet.
Access Bank Plc will now look to consolidate its operations in Mozambique into a single financial services unit, and hope that gaining new grounds will add bigger value to miles already covered after acquiring another banking asset in the Southern African nation.
Its subsidiary in Mozambique consummated a deal for the acquisition of African Banking Corporation, backed by London-listed financial services group Atlas Mara Limited, according to the lender's note to the Nigerian Exchange Limited on Tuesday. No mention was made of the value of the transaction yet.
Herbert Wigwe-led Access Bank wants its business outside Nigeria to provide 30 per cent of the group's profit this year and gaining in the southern end of the continent seems crucial to that goal, with two other acquisitions in Zambia and South Africa so far delivered between the start of the year and now, and another one to be completed in Botswana by June.
An already cluttered market in its base, Nigeria, is pushing the country's biggest bank by asset to seek growth in the rest of Africa at a time when the coronavirus crisis has grievously deteriorated credit quality and lenders still battle the headwinds of last year's record crash in the prices of oil on earnings. Oil and gas contributes the bulk of the credit base of Nigerian banks.
With the Mozambican takeover, the bank's combined assets from a proposed merger between Access Bank Mozambique S.A and the new acquisition will make it the seventh largest bank in the country, the document seen by PREMIUM TIMES shows.
Shares in Access Bank traded flat in Lagos on Tuesday, recording no price movement.
"We are building the scale necessary to compete effectively and efficiently in key African markets outside Nigeria and ensure we sustainably deliver strong return on invested capital in our African expansion," Mr Wigwe said.
"Scale is an important contributor to returns and this transaction is consistent with our rigorous efforts to create to create a strong presence with scale across Africa... "
But pursuing scale at all cost could be sometimes counter-productive and misjudging competition in the market where a company is planning expansion is one of the gravest mistakes of mergers and takeover deals.
The bank announced plans to shut down branches last May, estmated to be more than 300 across Nigeria, a year after it acquired the defunct Diamond Bank.
A month ago, Atlas Mara agreed to sell 78 per cent of its stake in Botswana-based African Banking Corporation to Access Bank as the group, headquartered in British Virgin Islands, proposes to offload its investments on the continent and exit Africa.
It holds the majority stake in Union Bank translating to nearly half of the bank's equity, which Access Bank and Zenith Bank are yearning to buy, according to a Bloomberg report, citing sources close to the heart of the matter. Union Bank has said the news is "unsubstantiated" and "based on mere rumours and speculations."
Copyright Premium Times. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English