Access Bank Plc has purchased a controlling interest in South Africa’s 74-year-old Grobank for about $60 million, its chief executive Herbert Wigwe said Tuesday, making it the first Nigerian bank to enter Africa’s most industrialised nation.
The South African acquisition is also the bank’s third in eight months – having taken over Kenya’s Transnational Bank in July and Zambia-based Cavmont Bank in January – and aligns with its continental expansion plan.
The loss-making Cavmont was bought for a nominal fee of 1 kwacha ($0.0014) from the Zambian arm of Namibian financial services group Capricorn.
The tier 1 lender ploughed in both equity and debt in Grobank as part of the grand plan to explore correspondent and trade banking deals on its way to becoming “Africa’s Gateway to the World”, Wigwe told CNBC Africa.
Access Bank also hopes to leverage the African Continental Free Trade Area (AfCFTA) agreement to enter Morocco, Algeria, Egypt, Ivory Coast, Senegal, Angola, Namibia, and Ethiopia. It is restructuring itself into a holding company and has received approval from Nigeria’s banking regulator.
The bank will open up the means to widen trade finance capacity in Grobank, which is presently increasing its attention on the country’s agriculture industry, Wigwe said. It has already received regulatory approvals for the acquisition, which is expected to close in Q2 2021.
“We have a full retail banking licence in South Africa. We will pursue a wholesale banking franchise. We will pursue trade finance,” Wigwe said.
The CEO however did not disclose the precise stake size but Access had said in a September note that “the first is an initial cash consideration for a 49 percent shareholding, increasing to a majority stake in the second tranche.”