Access Bank has confirmed that it is in the process of acquiring Kenya’s Transnational Bank. News of this first broke on Monday, with authorities in the East African country indicating that a takeover was imminent.
When finalized, the deal could see Access Bank take charge of 93.57% of its Kenyan counterpart’s assets, handing it a controlling stake in a financial house outside of its base in Nigeria. The deal is part of Access Bank’s drive to establish a foothold in other African economies.
Transnational Bank, a tier-four bank with a modest scope, is reported to have had a total assets base of about $113 million as of 2013. This pales in comparison to Access’s $16 billion asset valuation from last year. It has also struggled with non-performing loans in recent times; its balance sheets indicate that it had a net loss of $693,904 in 2018.
Herbert Wigwe, CEO of Access Bank, in an interview with This Day Newspapers, confirmed that a deal with Transnational was in the making. The newspaper quotes Wigwe as saying that Kenya’s financial regulators were in the know about it and that the deal could be finalized “this week or next week.”
Access Bank’s purchase of a majority stake in Transnational allows it to establish a presence in East Africa’s largest economy. Analysts are suggesting that it may be looking to ramp up its expansion effort in that country in the coming years.
While it seems to have picked a less challenging path to enter the region, Access’s selection of Transnational as a Launchpad may be connected with that bank’s lending to Kenya’s agricultural sector. Access Bank may have found the industry an attractive market to target with its product offerings.
Many of its subsidiaries in other countries have been established through acquisitions. This is true of its branches in the Gambia, Congo, and Rwanda.
Two other Nigerian banks, GT Bank and the United Bank for Africa (UBA) are already active in Kenya.
This latest move by Access Bank comes just months after it merged with Diamond Bank. The deal made it Nigeria’s biggest financial institution by the number of customers, with over 30 million people banking with it. It announced this Monday that it had completed the second phase of the merger.
It has since reported significant boosts to its earnings, with Profit After Tax (PAT) for 2019 climbing to ₦90.75 billion, from the ₦62.9 billion it recorded in the previous year.
Featured image source: Investors King
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