Why Access Bank May Sell Dollar Denominated Securities

A report from Bloomberg has indicated that Access Bank Plc is exploring the sale of dollar-denominated securities in the domestic market to support its expansion plans and comply with capital requirements set by the central bank.

Roosevelt Ogbonna, Managing Director Roosevelt Ogbonna disclosed that the bank plans to issue two tranches of these instruments, though he did not specify the amount to be raised.

One tranche will be directed toward the development of financial institutions, while the other will be offered on the open market, Ogbonna stated during a briefing in Lagos, Nigeria’s commercial hub, on Monday.

Ogbonna stated that while the bank is still finalizing the structure of the instruments, the tranche aimed at the development of financial institutions (DFIs) is expected to be raised and completed by the first half of next year. He stressed that the bank will use the government’s inaugural domestic sale of dollar-denominated bonds as a reference.

The federal government successfully issued its inaugural domestic dollar-denominated bond, attracting over $900 million in subscriptions.

The $500 million bond, coordinated by the Africa Finance Corporation (AFC), was issued at par with an annual coupon rate of 9.75% and achieved a 180% subscription rate.

The Ministry of Finance lauded the bond issuance as a landmark achievement for Nigeria, highlighting it as a step forward in establishing the country as a leader in financial innovation across Africa. The group had earlier concluded a N351 billion Right Issue in August, but details of the program have not been disclosed.

Mr. Ogbonna revealed that Access Bank Plc plans to expand into the United States by the first quarter of 2025 or, at the latest, 2026. Additionally, the bank’s UK subsidiary will establish an office in Hong Kong. Access Bank is known for its aggressive expansion strategy, particularly through mergers and acquisitions.

Earlier in the year, the bank announced the proposed acquisition of the National Bank of Kenya. The bank announced that it has entered into a binding agreement with Kenya-based KCB Group Plc (“KCB”) to acquire the entire issued share capital of National Bank of Kenya Limited (“NBK” or “the KCB is the parent company of KCB Bank Ltd, the largest commercial bank in Kenya.

Just this month, Access Bank announced it has obtained a provisional license to establish a banking subsidiary in Namibia.

Roosevelt Ogbonna, Managing Director and CEO of Access Bank Plc described the expansion into Namibia as a strategic move to enhance intra-African trade and establish a robust banking network across Southern Africa.

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