OpinionOPINION: The Access Bank Journey Of Resilience, Innovation And Transformation

OPINION: The Access Bank Journey Of Resilience, Innovation And Transformation

June 08, (THEWILL) – The origins of banking in Nigeria date back to the colonial era. In 1892, the African Banking Corporation (ABC) was founded in Britain, by Elder Dempster and Company Ltd, a Liverpool-based shipping agent. The ABC, entirely owned and operated by foreigners, was the first bank established in Nigeria. It was soon followed by other banks, beginning with the Bank of British West Africa (BBWA) in 1894, which eventually acquired the African Banking Corporation. The Anglo-Africa Bank Ltd, Nigeria’s first indigenous bank, and the Colonial Bank were founded in 1902 and 1917, respectively.

Subsequently, establishing banks became more straightforward and frequent, with 94 of 145 banks being founded between 1945 and 1952 by both local and foreign investors, marking the era of unregulated banking.

The proliferation of banks, many lacking solid financial foundations and competent management, led to frequent financial distress, partly due to the absence of regulation.

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The 1952 ‘Banking Ordinance’ was Nigeria’s first attempt to regulate banking activities, ushering in the era of regulated banking. The banking industry in Nigeria has since gone through several significant or transformational phases, including the Era of Free Banking (1892-1952), the Period of Regulated Banking (1952-1986), the Era of Deregulation (1986-2004), and the Era of Banking Consolidation combined with the Era of Stringent Banking Regulation (2009-2015). 2015 till date has seen the industry change at a rapid speed, but speed can broadly be defined as the era of financial inclusion, retail expansion, digitalisation, and corporate responsibility.

Despite various regulatory reforms aimed at improving the banking sector, Nigeria faced severe banking crises in the 1990s. In response, significant measures such as increasing the capital base of commercial banks from ₦2 billion to ₦25 billion in 2005 and implementing strict banking regulations in 2009 were introduced. These milestones were pivotal in shaping the Nigerian banking system. Nevertheless, one This article delves into the evolution growth of one of the banks that evolved from this crisis, and has today become a behemoth, with its sights set on becoming the world’s most respected African bank.

Rising from the ruins of its old formation, Access Bank PLC has experienced a remarkable journey. It evolved from a modest Nigerian bank into a leading financial institution with a significant presence in Africa and Europe with representative offices in China, Lebanon, India, and the UAE. With operations in 22 countries across three continents and more than 700 branches, Access Bank, a Tier-1 bank, ranked in the Top 4 in Nigeria, is offering full-service commercial banking, catering to more than 60 million customers and employing over 28,000 people.

Access Bank began its operations in May 1989 after obtaining a banking licence from the Central Bank of Nigeria. Initially, it faced challenges as a small player in the Nigerian banking sector. By 2002, when Aigboje Aig-Imoukhuede and Herbert Wigwe took over, Access Bank was ranked 65th out of 89 banks in Nigeria. The resilience of Access Bank is evident in its early challenges, as between 1989 and 2001, the bank experienced limited growth, operating only 27 branches in 14 years. Its financial performance was also poor, providing minimal returns to investors. Despite these early struggles, the new leadership was determined to turn the tide. The turning point came in 2002 when Aig-Imoukhuede and Wigwe implemented an ambitious transformation agenda. First, they assembled a formidable management team with a mandate to re-engineer and refocus the bank. This marked the beginning of a strategic transformation aimed at elevating Access Bank to a top industry position.

In March 2002, the Board of Directors appointed Aig-Imoukhuede as Managing Director/Chief Executive Officer and Herbert Wigwe, as Deputy Managing Director. The mandate was clear: Reposition the bank as one of Nigeria’s leading financial institutions within a five-year period (March 2002 to March 2007). This task was perceived by many as impossible given the realities of the Bank at the time.

The new management team subsequently created a transformational agenda for Access Bank, which represented a departure from all that characterised the Bank in the past and became the road map for the conversion of the lender into a world-class financial institution.

The impact of the transformation agenda was reflected in the first year. The bank grew its balance sheet by 100% and posted an impressive N1 billion profit-before-tax (PBT).

Though pale in comparison to the numbers it reports today, the PBT was more than the cumulative profit made by the bank in the previous 12 years. This also marked the beginning of what would be a six-year record triple-digit growth trend. Similarly, earnings per share had rebounded to 21 kobo from a negative 2 kobo position, leading to a declaration of a 5 kobo dividend to shareholders for the first time in three years.

Access Bank also expanded its banking portfolio, leveraging relationships with large corporate clients to drive organic growth. Strategic acquisitions also played a crucial role in this transformation, as in 2005, Access Bank acquired Marina Bank International Bank Ltd and Capital Bank Ltd (formerly commercial bank Crédit Lyonnais Nigeria).

In recognition of the role of an enhanced capital structure, the bank embarked on a capital-raising exercise in July 2007. The exercise was an astounding success recording more than 300 percent in oversubscription. The public offer comprised of an Over-The-Counter GDR placement of US$250 million which was similarly oversubscribed by 700 percent. The bank’s shareholders fund today stands at over N2.5 trillion with a shareholder base of over 920,000 domestic and foreign investors.

In 2011, Access Bank acquired Intercontinental Bank, significantly expanding its customer base and asset portfolio. By 2019, the merger with Diamond Bank created one of the largest banks in Africa by assets and customer base, strengthening its retail banking presence and digital banking capabilities.

Access Bank’s transformation has not only been about growth but also about setting a benchmark in the banking sector. The bank has been at the forefront of digital innovation, launching various digital banking products and services to enhance customer experience and financial inclusion. Its mobile banking app has made banking services more accessible to millions of customers, particularly in rural areas, contributing significantly to financial inclusion.

Expanding its footprint across the African continent, Access Bank now operates in 221 countries. Its African spread includes a presence in Angola, Botswana, Cameroon, Congo DR, Gambia, Ghana, Guinea, Kenya, Mozambique, Nigeria, Rwanda, Sierra Leone, South Africa, and Zambia. This pan-African strategy leverages the bank’s capabilities in trade finance and digitalisation to serve as a gateway between Africa and the rest of the world. Access Bank also has an operational presence in key financial centres such as China, Hong Kong, France, UAE, and the UK, and maximises this to facilitate international trade and investment.

The bank’s resilience and transformative strategies have translated into robust financial performance and industry recognition. Over the years, Access Bank has consistently reported growth in revenue, profit, and assets. It is now firmly recognised as one of the leading financial institutions in Africa, receiving numerous awards and accolades for its banking services, innovation, corporate governance, and social responsibility efforts.

Commencing in the second half of 2024, the Bank’s Africa and international expansion strategy will enter the consolidation and efficiency phase, aligning with its plan to become a top-five bank in Africa by 2027. Access Bank was set up in 1989 and began operations in May 1989, after it secured a licence from the Central Bank of Nigeria. It experienced initial struggles as the early years were challenging, with the bank operating as a small player in the Nigerian banking sector. As of 2002, when the duo of the then-young Aigboje Aig-Imoukhuede and Herbert Wigwe, partners and co-visioners, took over its ownership, Access Bank ranked 65 out of 89 banks in the banking industry.

Looking ahead, Access Bank plans to continue its expansion across Africa and other international markets, seeking opportunities for growth and innovation. The bank aims to further enhance its digital banking capabilities, focusing on customer-centric solutions and leveraging emerging technologies.

As soon as Aigboje Aig-Imoukhuede and Herbert Wigwe took over Access Bank’s reins of leadership, they assembled a formidable management team, which the mandate to reengineer and refocus the bank. That marked the beginning of a strategic transformation.

The new management focused on corporate banking, using relationships with large corporate clients to drive growth. The bank underwent a rebranding exercise to reposition itself as a reputable and customer-focused institution.

Going by mergers and acquisitions to bolster its operations, Access Bank, in 2011, bought Intercontinental Bank, significantly expanding its customer base and asset portfolio. By 2019, the bank consummated a merger with Diamond Bank, creating one of the largest banks in Africa by assets and customer base. This merger strengthened Access Bank’s retail banking presence and digital banking capabilities.

Access Bank has been at the forefront of digital innovation, launching various digital banking products and services to enhance customer experience and financial inclusion.

Its mobile banking app has made banking services more accessible to millions of customers, contributing to financial inclusion, especially in rural areas. Taking Africa by storm, Access Bank rapidly established its presence on the continent, by planting its subsidiaries across the landscape. In fact, the bank, which has expanded its footprint to 22 countries in Africa, including Ghana, Rwanda, Angola, DR Congo, Zambia, Gambia, Sierra Leone, and others, is concluding arrangements to launch another subsidiary in Tanzania. As part of its bank’s pan-African strategy, it focuses on leveraging its capabilities and expertise to drive economic growth and development across the continent. On the Global Reach, Access Bank has also established international offices in key financial centres such as London, Dubai, and China, facilitating international trade and investment.

Well-known for sustainability and was credited as the bank of Nigerian origin that pioneered sustainability, Access Bank has done a lot in sustainable banking. The Bank has integrated sustainability into its business model, focusing on responsible banking practices that contribute to social and environmental well-being.

The bank’s CSR initiatives cover various areas, including education, healthcare, environmental sustainability, and community development. Programmes like the Maternal Health Service Support (MHSS) and the W Initiative highlight the bank’s commitment to societal impact.

There is no doubt that the Access Bank’s re-engineering and processes have been reflected in its financial performance and recognition. Over the years, the bank has shown robust financial performance, consistently reporting growth in revenue, profit, and assets.

Maintaining market leadership, the bank is recognised as one of the leading financial institutions in Africa. Recognising its strides and achievements in the industry, Access Bank has received numerous awards and accolades for its banking services, innovation, corporate governance, and social responsibility efforts.

Notwithstanding the murky waters of the economy, Access Bank remains undaunted and is adapting to change. Just like many financial institutions, the bank has faced challenges such as economic volatility, regulatory changes, and competitive pressures.

It has, however, shown resilience and adaptability, continuously evolving its strategies to navigate these challenges. Looking forward, the bank plans to continue its expansion across Africa and other international markets, seeking opportunities for growth and innovation. Besides, the bank also plans to further enhance its digital banking capabilities, focusing on customer-centric solutions and leveraging emerging technologies.

Access Bank’s journey from a small Nigerian bank to a leading African financial institution is a story of strategic vision, innovation, and resilience. Through leadership, strategic acquisitions, technological advancements, and a commitment to sustainability and social impact, Access Bank has set up itself as a powerhouse in the banking industry. Its future endeavours promise continued growth and a lasting positive impact on the communities it serves.

*** Written by Joseph Yeduma

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