The Managing Director of Access Bank Plc, Roosevelt Ogbonna, has said that operating banking business in Nigeria and the West African region is not as profitable as banking in South and East Africa.
Ogbonna said this at the ‘Access Holdings Facts Behind the Rights Issue’ monitored by NewsNGR.
He said the rights issue of 17.7 billion shares at a price of N19.75k per share is a precursor for its plans to upscale and make history in the Nigerian banking industry.
Access finished full year 2023 with gross earnings of N2.6tn and N729bn profit before tax.
Ogbonna said, “We are very selective in the markets that we are going to, and we are chasing the money. It’s not a return on ego. We are focused on where the money is. If you look at the African continent and you are to split it from an economic power perspective and where the real banking profit is, it’s in Southern Africa, followed by East Africa, then North Africa, West Africa, then Central Africa.
“I know that many people think we make so much money in West Africa. The reality is that with the capital that we have in this part of the world, if we move it to West or to South or East Africa, it will be a lot more profitable.”
According to him, banks that pay huge dividends do not have a positive Net Present Value (NPV).
The MD said, “So once we celebrate those who pay big dividends, understand the signal which that means. It means they have zero positive NPV projects. We have been in investment mode and we have clearly made the bets of what we want across the continent.”
NPV analysis is used to help determine how much an investment, project, or any series of cash flows is worth, according to corporatefinanceinsitute.com.
According to Ogbonna, Access considers investments that has helped it grow to the biggest African bank in the UK.
Ogbonna revealed that the bank is eyeing the US market as part of a strategy to raise enough dollars to offset obligations.
Nigeria is suffering a foreign exchange crunch which led to the fall of naira from around N550 per dollar last year to N1,513 in July 2024.
The MD said, “Our Paris and Malta business means for euros we can clear ourselves, both cash and instruments. I guess the big elephant in the room is what about USD? Because dollar is still the most convertible currency and trade is done mostly in dollars.
“I don’t need to say much, but you have to know that Access US is coming.”
Ogbonna said the bank has the ambition to be among the top five banks in Africa.