Access Bank is seeking to acquire a 100% stake in Cavmont Bank, a financial institution located in Zambia. If the deal is sealed, it would effectively make the institution a subsidiary of its Nigerian counterpart.
Details of this were contained in a document signed by Access Bank’s Company Secretary, Mr Sunday Ekwuochi, and delivered to the Nigerian Stock Exchange (NSE). According to the statement, the bank had entered into negotiations with Cavmont Capital Holdings Plc, the entity to which Cavmont Bank belongs.
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It, however, indicated that an agreement was still yet to be reached, and urged investors to be cautious about their engagement with Access Bank shares in response to the news. In the case that an agreement is reached, it would be referred to the appropriate regulatory bodies for approval, the statement said.
Cavmont Bank is headquartered in Lusaka, Zambia. As of 2019, it had just under 230 staff, about 47,000 active customer accounts, and 20 branches across its home country. Its latest annual report indicated a 6% growth in its customer deposits and an 18% expansion in gross loans and advances, compared to the previous year.
Its dwarfed by the much bigger Access Bank, which became Nigeria’s largest bank by the number of customers after the merger with Diamond Bank. The consolidated entity now serves over 30 million persons.
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However, Cavmont Bank may provide Access Bank with an opportunity to make inroads into Zambia. Thus far, the Nigerian bank’s expansion across Africa has happened mostly via acquisitions. Recall that it had bought Kenya’s Transnational Bank late in 2019. That move was seen as an attempt to establish a presence in East Africa’s largest economy.
Access Bank had gone through a phase of strong growth following its merger with Diamond Bank in 2018. However, the recent COVID-19 pandemic had caused it to reevaluate its expenses and fashion plans to cut costs.
Its plan to buy a moderately sized institution beyond Nigeria’s borders may be taken as a sign that its position isn’t as weak as many had feared.
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