Nigeria’s Biggest Bank Targets 30% Profit Outside Home Market
(Bloomberg) -- Access Bank Plc, Nigeria’s biggest lender is looking to generate as much as 30% of profit outside its home market, following a series of acquisitions spanning East and West Africa last year.
The lender expects African subsidiaries and its U.K. unit to account for about 25-30% of profit before tax in the next three to five years from 21% in the third quarter, it said in response to questions via WhatsApp. The same range of addition to pre-tax profit is projected to assets, deposits and revenue, it said.
The Lagos-based bank currently operates in 12 countries. It said this year it will expand in eight new African markets by setting up offices in some countries, partnering with existing banks in some nations or deploying digital platforms to provide services to customers.
Nigeria’s biggest lenders including Access Bank, Guaranty Trust Bank Plc and Stanbic IBTC Holdings Plc are diversifying outside their core operations or expanding across Africa in an attempt to boost revenue after covid-19 and a plunge in crude oil curtailed the home market.
“We see strong contributions from our key African markets, regional hubs and our outside of Africa international business driven out of the UK,” the lender said. In Nigeria, the bank is looking to transition to a holding financial institution this year which will enable it open subsidiaries in insurance brokerage and payments.
It plans to grow loans by 10% this year to support clients whose businesses are benefiting from the coronavirus pandemic such as telecom and health companies, according to the lender. Although Nigeria exited a second contraction in four years in the fourth quarter, the sluggish economy gives no incentive to further boost lending, it said.
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