A shakeup of Nigeria’s banking industry leadership is in the works and Access Bank is again at the centre of the storm. The bank is frantically warming up for the number one position by the size of the balance sheet. Having travelled from the backyard to the frontline of Nigerian banking, Access Bank is jockeying for a higher height still.
The high jump from the third place on the industry ranking to the first by asset base will happen just overnight by its acquisition of Diamond Bank. The business combination is expected to give birth to an over N6 trillion naira bank – the largest banking institution in Nigeria.
Access Bank is already carrying the largest credit portfolio in the banking industry at about N2 trillion at the end of September 2018, beating FBN Holdings’ figure of N1.92 trillion. The leadership margin is set to widen sharply in no time. With a combined gross customer lending volume of close to N3 trillion, the emerging bank will account for close to a third of the total loans and advances of the top five banks in Nigeria at the moment.
The emerging bank will also become the largest single depository in the Nigerian banking space with customer deposits expected to be in the region of N4 trillion at year end. This will be a high jump from the third position at the moment with customer deposits of N2.47 trillion at the end of the third quarter in September 2018.
There will be a major reinforcement of the equity cushion of the emerging bank from the present level of N473 billion of Access Bank to a post combination standing of close to N700 billion. This would be one of the top three largest equity resources in the Nigerian banking industry.
The earning capacity of the post acquisition bank appears equally headed for the top of the banking industry ranking. With a current revenue projection of N500 billion for Access Bank for the 2018 full year and a N190 billion projection for Diamond Bank, the emerging bank could build the largest revenue capacity at a period of tight revenue growth for banks. Gross earnings projections for Zenith Bank and FBN Holdings for 2018 are N640 billion and N607 billion respectively. The high growth speed in the balance sheet and revenue numbers of the emerging bank will expectedly slow down when it comes to the bottom line performance […]
