Access Bank Plc, Nigeria’s largest lender by assets, is exploring the sale of dollar-denominated securities in the local market to support expansion and meet Central Bank of Nigeria capital requirements.
- This initiative comes as the naira has depreciated by over 70% since June 2023, creating a challenging economic landscape for Nigerian businesses.
- Managing Director Roosevelt Ogbonna indicated that the bank is considering two tranches of dollar-denominated instruments, aiming to raise funds through development financial institutions (DFIs) and the open market.
- While the exact amount has not been disclosed, the tranche focused on DFIs is expected to be completed by the first half of 2025.
- Access Bank plans to use the government’s recent domestic sale of dollar-denominated bonds as a benchmark.
- President Bola Tinubu’s administration raised $900 million from five-year bonds at a coupon rate of 9.75%, nearly doubling the initial target.
- The bond issuance attracted investors seeking high returns and a hedge against the naira’s depreciation, underscoring market demand for secure dollar-based.
As Nigeria’s currency experiences volatility, local residents and businesses are accumulating dollar savings to safeguard against the weakening naira.
- Access Bank’s move to target dollar-denominated securities reflects this growing demand, positioning the bank to achieve its expansion goals while catering to investor interest.
- The bank operates in 24 countries and aims to become one of Africa’s top lenders within five years by doubling its assets outside Nigeria.
- To facilitate this growth, Access Bank plans to strategically enter new markets, including opening a U.S. branch by early 2025 and establishing a presence in Hong Kong through its UK subsidiary by October 30, 2024.
- In addition to expansion, the bank is focused on strengthening its capital to comply with new thresholds set by Nigeria’s central bank, which has allowed financial institutions two years to meet these updated requirements.
- The sale of dollar-denominated securities within the domestic market provides Access Bank a pathway to both growth and resilience in an increasingly dollar-driven investment landscape.
