Access Bank Ventures into South Africa, As It Buys A $60 million Stake in Grobank

Access Bank, Nigeria's biggest lender, has paid the sum of almost $60 million to acquire a stake in Grobank, a South African Bank. 

Herbert Wigwe, Access Bank's CEO, said on Tuesday that this move indicates the peak of the company's aspiration to move into the South African market, which is Africa's most industrialized market.

Access Bank has become the first financial institution in Nigeria to venture in to South Africa, and the bank went in big as expected, investing both equity and debt. This is another step in Access Bank's plan to explore deals with other financial service institutions and expand to other parts of the continent, even as it works its way to becoming Africa's Gateway to the World. 

Herbert Wigwe said the bank(Access) was going to work on expanding trade finance capabilities with Grobank, which is currently focused on the South African agriculture market.

The exact size of the stake wasn't mentioned but according to a note Access Bank gave last September, the first investment is for 49 percent of the company, after which it will increase to a majority holding on the second investment.

On Friday, the 26th of March, Access Bank announced that it had received regulatory approval from the Central Bank of Nigeria for the deal. The two lenders are expected to wrap up the acquisition deal in the second quarter of this year.

It will open up the means to widen trade finance capacity in Grobank, which is presently increasing its attention on the country’s agriculture industry.

This isn't Access Bank's first attempt at expanding. In August, it agreed to acquire Namibian financial services group, Capricorn, which kept incurring losses at the time, for a nominal fee of $0.0014, which is equivalent to 1 kwacha. 

In June of 2020, the bank acquired Transnational Bank Limited in Kenya, giving it 100 percent ownership of the company.

Last year, Access Bank and Diamond Bank merged to form a Tier 1 bank, operating across three continents, and 12 countries, with customers reaching 29 million. If Access bank is able to secure the deal, it may help its stock market price.