Access Holdings, Parent Company of Access Bank, to Raise $1.5 Billion in Light of CBN Regulatory Requirements

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Access Holdings, the parent company of Nigeria's largest bank by asset base, Access Bank, is embarking on a significant capital raise of $1.5 billion (₦2.09 trillion). This move aims to fuel their ambitious growth plans across Africa and comply with a new capital requirement set by the Central Bank of Nigeria (CBN).

The capital raise will be achieved through a two-pronged approach. Access Holdings plans to issue either bonds or shares, with the specific amount yet to be determined. Additionally, they will seek $287 million (₦399.9 billion) from existing shareholders through a rights issue.

This capital infusion is necessary to meet the CBN's recently increased minimum capital requirement for Nigerian banks. By March 31, 2026, all banks must have a minimum capital base of $364.56 million (₦500 billion). The CBN implemented this change to address the rising macroeconomic challenges facing Nigeria, Africa's largest economy.

Currently, Access Bank stands as the third most capitalized bank in Nigeria, with a capital base of $190.6 million (₦251.8 billion). To comply with the new regulation, they need to raise an additional $187.8 million (₦248.1 billion).

On Thursday, Access Holdings, Africa's largest consumer bank holding company, announced plans to seek shareholder approval for the capital raise at their annual general meeting scheduled for April 19, 2024. One potential method involves increasing the bank's issued shares from ₦17.7 billion to ₦26.6 billion through a rights issue. Regulatory approval for this approach is still pending.

Access Holdings' decision to raise capital comes amidst their rapid expansion across Africa. A recent example is their acquisition of Kenya's National Bank of Kenya (NBK) from KCB Group in a deal valued at around $100 million. According to KCB Group CEO, Paul Russo, retaining NBK would have required a significant capital injection of up to $60.7 million, on top of the $106.3 million already invested since acquiring the bank in 2019. The additional capital from this raise will allow Access Bank to solidify its foothold in East Africa's largest economy through the NBK acquisition.

Access Holdings currently operates in 15 African countries, with a clear goal of growing its presence and becoming the continent's leading bank by 2027. This capital raise positions them to achieve this ambitious target while ensuring they meet the new regulatory requirements set by the CBN. The move reflects the evolving landscape of the Nigerian banking sector, characterized by stricter regulations and a strong drive for growth among financial institutions. With this additional capital, Access Bank is poised to play a more prominent role in shaping the future of African finance.

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