Access Holdings Faces Uncertainty Executing Strategy as Face of Bank Wigwe Dies

In March 2022, Herbert Wigwe, the late CEO of Access Holdings (HoldCo) Plc, outlined how he sees payments, pensions and insurance businesses as subsidiaries to help lead the financial services firm’s next growth phase, with an aim to becoming one of the continent’s biggest banks over the next five years.

“What the HoldCo strategy allows us to do is to look at new markets and new opportunities that the traditional bank does not allow us to do,” CEO Wigwe said then at a briefing with reporters in Lagos, where MoneyCentral was present.

“My sense is that by 2027, you will see us getting close to one of the top-5 banks in the continent,” from its then ranking of 12th.

Today, some 2-years later, the tragic chopper accident that took the life of Wigwe, his wife, son, Bimbo Ogunbanjo 61, a former president of the National Council of the Nigeria Stock Exchange and 2 others in California, USA, has thrown major uncertainty into the execution of that strategy.

“Mr. Wigwe is a very focused leader, whose sense of execution is quite admirable. Himself and Mr. Aig Imokhuede were quite complementary, not just in their collective capacity to envision but also their joint capability in ensuring a successful execution of requisite strategies to achieve their goals,” Abiola Rasaq, economist and former head investor relations at United Bank for Africa (UBA) Plc, told MoneyCentral.

“No doubt, Mr. Wigwe leaves a big gap in the “war room” of Access Holdings, albeit I believe both partners (Wigwe and Imokhuede) have built a good pipeline of impressive leaders like Mr. Roosevelt (Access Bank GMD), whose tenacity and brilliance is not only going to be helpful in sustaining the vision of Access Holdings but also prove the sustainability of the institution through this test of its succession planning programme.”

Rapid expansion

Access Bank is weighing expansion to 26 countries through mergers and acquisitions by the end of 2027, according to a presentation posted on the Nigerian stock exchange.

Specifically, the lender hopes to expand its footprint in France, the UK, Hong Kong, Malta, Dubai, India, Ghana, Kenya, China and the United Arab Emirates (UAE), among several others.

“Across Africa, there is an opportunity for Access to extend financial services to the unbanked and deepen its financial services offerings to banked customers,” the bank said.

Access expects revenue from its home market to decline to 52% by 2027, down from 82% in September 2022, because of its proposed geographical expansion while the share of profit before tax from Nigeria will probably drop to 33% from 63%, it said in five-year strategy presentation posted on the website of the Nigerian Exchange.

Access Holdings made a loss of N6.7 billion from its rest of Africa operations in 2022.

Market Impact

Nigerian stocks will react to the tragic loss of Mr. Wigwe when markets resume trading on Monday. Wigwe, was the Company’s founding Group Chief Executive Officer and former Group Managing Director of its flagship subsidiary Access Bank Plc.

Access Holdings has for some time developed a succession planning programme and the adherence and execution of that plan can be seen in the ascension of Mr. Roosevelt Ogbonna to the position of the GM of the bank when Access transformed into a holding company.

Nevertheless, analysts tell MoneyCentral that the death of Wigwe will be a test of how institutionalized decision making and execution effectiveness is, at such a large corporation, in the absence of a significant figure like Mr. Wigwe.

Access Holdings reported a 1,359% surge in total comprehensive income to N490.9 billion ($350 million) in the 9-months period to September 2023.

A breakdown of the total comprehensive income for the period showed that Profit for the period for continuing Operations came in at N250.44 billion (+83%), while other comprehensive income was N240.5 billion (made up largely of unrealized foreign currency translation difference of N279.43 billion).

Access Holdings shares are up 6.9% year to date and trade at a price to book ratio of 0.55x. The bank has a market capitalisation of N879.7 billion.

“Broadly, I think it is expected and justified for investors to be concerned about the sustainability of the corporation and of course such concern about succession planning may cause some bearish pressure on the shares on the Nigerian Exchange. Nonetheless, I think the length and depth of such investor reaction would depend on the corporate actions that follow this sad event,” Rasaq told MoneyCentral.

“Hopefully, the corporation would make relevant announcement in due time as regards the succession of Mr. Wigwe and of course investors would actively track the performance of the institution to understand the health of the institution, quality of earnings and other fundamentals going forward to determine how the gap left by Mr. Wigwe is being filled, and whether or not there are negative or positive impacts from the succession.”

Commenting on the passage of Mr. Wigwe, Mr. Abubakar Jimoh, Chairman of Access Holdings said:

“The Access Family has suffered a major loss with the passing of Dr. Wigwe who was a great friend and fine gentleman. He had a prodigious intellect, admirable personal qualities, and vast business experience which he brought to bear on the Access Family and for which we owe him a debt of gratitude. In line with the Company’s policy, the Board will soon announce the appointment of an Acting Group Chief Executive Officer even as we remain confident that the Access Group will build further on Dr. Wigwe’s legacy of growth and operational excellence.”

Another source told MoneyCentral that the sudden sad passing of Mr. Wigwe would be a challenge to the Executives in filling the big gap. It may also be a reason for Mr. Aig Imoukhuede to get more involved on the Board, in providing relevant oversight, and ensuring that the corporation stays on track with the vision, the source said.

Wigwe’s influence and ownership stake in Access Holdings

The late Group Chief Executive Officer of Access Holdings Herbert Wigwe in April 2023, increased his indirect stake in the bank holding company by 1.59%, with a purchase of 567.59 million new shares, through Tengen Holding (Mauritius) Limited.

It brought Wigwe’s total holdings to 2.323 billion shares, equivalent to 6.53% of the total outstanding shares of Access Holdings, up from 4.94% in December 2022.

The transaction was concluded on April 27, 2023 at a purchase price of N10 per share, for a total consideration of N5.67 billion, according to a filing on the Nigeria Exchange Limited.

Going by the public disclosure, Wigwe owned less than 10% of the ordinary shares of Access Holdings, nonetheless sources tell MoneyCentral, it may be argued that he wields influence and control that suggests he may have ownership and economic interest beyond such disclosure.

“This would remain speculative except otherwise proven through a thorough analysis of the ultimate beneficial owner of the shareholding structure, as only such due diligence may reveal if some vehicles beyond those three indirect ownership disclosed, are also traceable to him. Hence, in the surface it suffices to say that he is only slightly above 6% of the corporation, even as it may be said that he wielded notable influence or perhaps control over the institution, especially in conjunction with Mr. Aig Imoukhuede,” another banking source told MoneyCentral.

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