Access Bank PLC Consolidates Operations in East Africa, Completes Acquisition of BancABC Tanzania

AJAGBE ADEYEMI TESLIM

SPONSORED BY: H&H

Access Bank PLC (“the Bank”) has announced the successful completion of its acquisition of African Banking Corporation (Tanzania) Limited (“BancABC Tanzania” or “BancABC”), in line with its strategic expansion goals.

This milestone follows the Bank’s initial announcement in July 2023 and marks yet another step in its journey to become the world’s most respected African Bank.

With the successful acquisition of BancABC Tanzania by the Bank, BancABC operations will now be merged with the consumer, private, and business banking operations of Standard Chartered Bank Tanzania at completion to form a new, entity to be known as Access Bank Tanzania.

This furthers our aspiration to be a strong player within the East Africa region, while adding greater depth and breadth to our pan African operations creating more significant opportunities for financial inclusion, diversified product range and enhanced customer experience. Access Bank’s presence in over 22 countries presents a robust platform that can be leveraged to boost intra and inter Africa trade and payments.

Roosevelt Ogbonna, Access Bank’s Managing Director/Chief Executive Officer, commented on the transaction, saying, “This strategic move represents a notable step towards setting a railroad in Tanzania for intra-African trade within the East African region, Africa and the rest of the world. It underscores our commitment to creating a robust East African banking network, driving positive change and innovation.

“We are excited about the opportunities this acquisition presents for our operations in Tanzania and are eager to leverage our combined strengths to deliver exceptional financial solutions and experiences to our customers.”

Commenting on the transaction, John Imani, Managing Director, African Banking Corporation (Tanzania) Limited, said, “The completion of our transaction with Access Bank, not only underscores Access Bank’s strong confidence in our operations and the Tanzanian market but brings new and exciting opportunities for our customers, employees, and stakeholders. The new entity is poised to enhance our service offerings, leveraging Access Bank’s extensive resources and expertise to deliver even greater value to our clients. We look forward to an exciting and prosperous future as part of the Access Bank family, driving economic growth and financial inclusion across Tanzania.”

Access Bank is committed to enhancing customer satisfaction and brings with it a robust suite of offerings to foster the aspirations of its customers.

AJAGBE ADEYEMI TESLIM

SPONSORED BY: H&H

Fidelity Bank Plc (“Fidelity Bank” or the “Bank”) has concluded all necessary arrangements to raise a total of up to ₦127,100,000,000.00 (One Hundred Twenty-Seven Billion, One Hundred Million Naira) by way of a Rights Issue to existing shareholders and a Public Offer (the “Combined Offer”).

L – R: Stanley Amuchie, Executive Director, Chief Operations & Information Officer, Fidelity Bank Plc; Oladele Sotubo, MD/CEO Stanbic Capital; Dr Nneka Onyeali-Ikpe, MD/CEO, Fidelity Bank Plc; Mustafa Chike-Obi Chairman, Fidelity Bank Plc; Ezinwa Unuigboje, Company Secretary, Fidelity Bank Plc; and Jubril Enakele, Chief Executive, Iron Global Markets Limited at the signing ceremony of the Fidelity Bank Public Offer and Rights Issue at the Bank’s head office in Lagos recently.

The Combined Offer is a part of the Bank’s strategy to increase its share capital base in compliance with the revised minimum capital requirements for Nigerian commercial banks introduced by the Central Bank of Nigeria (“CBN”) on 28 March 2024.

Overall, the Bank expects that the capital raised would support the Bank’s efforts to drive sustained growth and diversification of its earnings base.

The Signing Ceremony with respect to the Combined Offer was held at the Board Room of the headquarters of Fidelity Bank in Lagos on Wednesday, 5 June 2024.

The Bank’s shareholders had already approved the Rights Issue and Public Offer at the Extra-Ordinary General Meeting held on Friday, 11 August 2023. Under the Rights Issue, 3,200,000,000 (Three Billion Two Hundred Million) ordinary shares of 50 kobo each will be offered in the ratio of 1 new ordinary share for every 10 ordinary shares held as of 05 January 2024, at ₦9.25 per share. For the Public Offer, 10,000,000,000 ordinary shares of 50 kobo each will be offered to the general investing public at ₦9.75 per share.

Stanbic IBTC Capital is the Lead Issuing House to the Combined Offer, whilst the Joint Issuing Houses include Iron Global Markets Limited, Cowry Asset Management Limited, Afrinvest Capital Limited, FSL Securities Limited, Futureview Financial Services Limited, Iroko Capital Market Advisory Limited, Kairos Capital Limited and Planet Capital Limited.

The Acceptance and Application lists for the Rights Issue and Public Offer are expected to open on Thursday, 20 June 2024 and close on Monday, 29 July 2024.

At the Signing Ceremony, Managing Director and Chief Executive Officer, Fidelity Bank PLC, Dr. Nneka Onyeali-Ikpe, disclosed that the proceeds of the Combined Offer will be applied towards investment in IT infrastructure, business and regional expansion, and investment in product distribution channels.

The Chief Executive of Stanbic IBTC Capital, Oladele Sotubo, commended Fidelity Bank’s management team for their commitment towards executing the Combined Offer.

He lauded their efforts for being at the forefront of achieving the CBN’s revised minimum capital requirements for Nigerian commercial banks. While thanking the Bank for trusting Stanbic IBTC Capital to lead and advise on this landmark transaction, Dele expressed confidence that the deal would encourage other corporates to tap into the equity capital markets to raise funding to meet their strategic business needs.

The rights circular for the issue, which contains a Provisional Allotment Letter and the Participation Form, will be mailed directly to shareholders of the Bank. Printed copies of the Public Offer Prospectus can be obtained at the offices of Fidelity Bank and the Issuing Houses during the Public Offer Application Period.

All existing shareholders and prospective investors are encouraged to read the Rights Circular and Prospectus and, where in doubt, consult your Stockbroker, Fund/Portfolio Manager, Accountant, Banker, Solicitor, or any other professional adviser for guidance before subscribing.

AJAGBE ADEYEMI TESLIM

SPONSORED BY: H&H

Investors in Fidelity Bank Plc have earned more than 507 per cent in capital gains over the past five years, ranking above all other major return benchmarks at the Nigerian stock market and the entire banking sector.

Trading reports at the Nigerian stock market for the five-year period between May 31, 2019 and May 31, 2024 showed that Fidelity Bank outperformed all key indices at the stock market.

Fidelity Banks share price rose by 507.14 per cent over the period, representing average annual capital gain of 101.43 per cent.

These returns underscore Fidelity Banks immense value as a stock for all times, helping investors to hedge against inflation while preserving significant long-term value.
With 507 per cent capital gain in five years and average annual gain of more than 100 per cent, the return analysis implies that investment in Fidelity Bank is more attractive than other class of assets, including fixed-income securities such as government and corporate bonds; real estate investment and mutual funds among others.

The high divisible nature of shares investment and high free float of Fidelity Bank, which makes the banks shares easily available, underline the bank as a most attractive investment option for all cadres of investors- small, medium and high networth; retail and institutional investors.

Comparative analysis showed that Fidelity Bank outperformed all other major market indices with the banks average annual return for the period twice the average return by the overall market and almost four times of average return in the banking sector.

The All Share Index (ASI) – the common, value-based index that tracks all share prices at the Nigerian Exchange (NGX), which is widely regarded as Nigerias benchmark for equities market, recorded a five-year return of 219.61 per cent, an average annual return of 43.9 per cent.

Contrary to the significantly above average performance of Fidelity Bank, the NGX Banking Index-which tracks the banking sector, doubled by 120.53 per cent over the five-year period, representing average annual return of 24.11 per cent, more than 77 percentage points below Fidelity Banks average return.

Two other major price indices- the NGX 30 Index and NGX Main Board Index, recorded five-year cumulative return of 185.73 per cent and 265.6 per cent respectively, representing average annual gain of 37.15 per cent and 53.1 per cent respectively.

The NGX 30 Index tracks share prices of the 30 largest companies at the stock market while the NGX Main Board Index represents the largest and most diversified group of listed companies at the stock exchange. Fidelity Bank is quoted on the main board, like most other major banks and companies at the stock market.

The average annual return of 101.43 per cent underlines that Fidelity Bank provides substantial return for investors, even where such investors had borrowed money at the ruling interest rate and the invested fund was adjusted for impact of inflation rate.

Nigerias inflation rate peaked at a high of 33.69 per cent in April 2024 while the Central Bank of Nigeria (CBN)s Monetary Policy Committee (MPC) recently increased the Monetary Policy Rate (MPR), otherwise known as benchmark interest rate, to 26.25 per cent.

Fidelity Banks share price, which closed May 31, 2019 at N1.68 per share, rose successively to N10.20 per share by the end of May 2024. The ASI had, during the period, rose from its opening index of 31,069.37 points to close weekend at 99,300.38 points. The NGX Banking Index rose from 361.57 points to 797.37 points. The NGX 30 Index, which opened the period at 1,286.68 points, closed the period at 3,676.44 points. The NGX Main Board Index appreciated from 1,267.54 points to close weekend at 4,634.31 points.

Market analysts are unanimous that share prices are illustrative of the fundamental values of quoted companies.

Managing Director, HighCap Securities Limited, Mr. David Adonri, said the price of any stock in the market is a correct reflection of the market value for the stock.

Managing Director, Globalview Capital Limited, Mr. Aruna Kebira, explained that the market price of a stock represents the disposition of the investing public to the stock at a given period, noting that there should be consideration for both the market value and the book value or fundamentals of a stock.

It could be summarized that the market price of a stock is premised on the psychology of the market, the markets mood as well as market sentiments, Kebira said.

Chief Executive Officer, Sofunix Investment and Communications, Mr. Sola Oni, said the stock market shows both the current and future prospects of shares.

Share price reflects the current value of a company but also reveals the future prospects, Oni said, noting that investment analysts traditionally combine market price and book values to determine the possible outlook of a stock.

Five-year review of the audited reports and accounts of Fidelity Bank showed strong correlation between the banks upwardly share pricing trend and expansive growth in its business operations.

The banks pre-tax profit had risen from N30.35 billion in 2019 to N124.26 billion in 2023, an increase of 309.4 per cent. Net profit after tax also grew by 203.3 per cent from N42.80 billion in 2019 to N129.80 billion in 2023. Earnings per share has risen successively from 98 kobo in 2019 to N3.11 per share in 2023.

The banks balance sheet had expanded by 195.26 per cent from N2.11 trillion in 2019 to N6.23 trillion in 2023, within the fastest growth in the industry. Customers deposits, which underlines the competitive market share, more than tripled from N1.225 trillion in 2019 to N4.01 trillion in 2023, an increase of 227.35 per cent. Shareholders funds had also grown from N234.03 billion to N437.31 billion.
Market pundits expected Fidelity Banks share price continue to rise, citing several factors that illustrated the upside potential for the stock.

Independent investment research reports by many market pundits showed that Fidelity Bank was assigned buy ticker, a recommendation to investors to consider the potential attractive returns of the bank.
The research reports were based on the historical and current operational performances of the bank as well as the clear-sighted implementation of the banks growth plan. The reports also considered the quality of board and management and the general human capital and resources of the bank.

The investment advisory reports included those of Afrinvest Group, FSDH Capital and CardinalStone among others.

Analysts were unanimous that Fidelity Banks share price could double in the period ahead given professional assessment of top traditional performance parameters including the companys operational reports, investors preference and projections.

Already, interim report and account of the bank for the first quarter ended March 31, 2024 showed that the bank started the current business year on stronger footing with three-digit growths across key performance indicators.

The three-month report, released at the NGX, showed that gross earnings increased by 89.9 per cent to N192.1 billion in first quarter 2024.

The banks top-line performance continued to be driven by broad-based growths across income lines with interest income rising by 90.7 per cent and non-interest income growing by 84 per cent in first quarter 2024.
Growth in interest income was primarily spurred by a higher yield environment and strong earning assets base, while the increase in non-interest income was led by double-digit growth in account maintenance charges, foreign exchange (forex)-related income, trade, banking services, and remittances, supported by increased customer transactions.

Profit before tax doubled by 120 per cent to N39.5 billion in first quarter 2024 as against N17.9 billion in first quarter 2023. The banks performance was driven by expanding market share with total deposit rising by 17 per cent within the three months to N4.7 trillion, compared with N4 trillion recorded at the end of 2023. The bank also increased its supports for national economic growth with net loans and advances rising by 21 per cent from N3.1 trillion at the end of 2023 to N3.7 trillion by March 2024.