Moody’s Investors Service has identified Access bank plc, Guaranty Trust Bank plc (GTBank) plc, among others to be equipped for expansion push across Africa and the world.
Moody in its report stated that Nigerian banks expanding into the rest of the continent or diversifying into other financial services will be better insulated from shocks than they were during the global financial crisis..
The likes of Access Bank and GTBank are following peers FBN Holdings Plc and Stanbic IBTC Bank to transition to financial holding companies that will protect their local banking assets from other businesses.
Access Bank plans to open a payments unit and increase its African footprint, while GTBank is looking to establish subsidiaries in asset management. Survival Strategies
The GMD/CEO, Access Bank , Herbert Wigwe recently said, “We have received the Central Bank of Nigeria (CBN)’s approval-In-Principle for a holding company (“HoldCo”) structure which will enable us further accelerate our objectives around business diversification, improved operational efficiencies, talent retention as well as robust governance.
“The year has been challenging for all and I would like to appreciate our customers for their unwavering loyalty in these uncertain times. Recognizing the adverse effects of the recent events on our customers, we remain committed to delivering superior value to our customers and providing innovative solutions for the markets and communities we serve.
“Going into the last quarter of the year, our focus remains on consolidating our retail momentum and expanding our African footprint.
“The next two years will see updates with regards the realization of synergies and actualization of the Bank’s strategic intent.
“Finally, I would like to thank our people and shareholders as we could not have achieved these feats without their dedication, commitment and support.”
The CBN modified rules in 2010 after the global debt crisis and the abuse of client funds brought the industry to verge of collapse.
Here are some comments from Peter Mushangwe, a banking analyst at Moody’s, on the new drive: “Regulation this time will be tighter and regulators will ringfence local depositors and senior creditors.
“In 2008 and 2009, Nigerian banks funded their non-banking activities using the deposits originated in their Nigerian operations.” Nigerian banks usually expand into West Africa and Central Africa before moving to East Africa.
“Some of the neighboring countries have weaker operating condition and regulations and therefore present risks.
“However, due to the general low penetration and growing per-capita income, they also present long-term opportunities.”
“Diversification will create resiliency in both revenue generation capacity and asset quality for banks.
“Nigerian banks are facing challenges in revenue growth due to the difficult operating environment.”