In a corporate disclosure on the Nigerian Stock Exchange, Access Bank Zambia Limited, a subsidiary of Access Bank Nigeria Plc, disclosed that it is now in advanced discussion with Cavmount Bank Limited, wholly-owned subsidiary of Cavmont Capital.
The scheme of business combinations shows sub-Saharan Africa lenders are seeking diversified earnings opportunities amid the coronavirus pandemic ravaging economies across the globe.
Analysts have said that proposed strategic plans will benefit the parent company, allaying fears of investors who had thought another round of merger and acquisitions would overwhelm the already bloated operating expenses of Access Bank.
“Zambia is a much smaller country than Nigeria and the impact won’t be that much on the Expense line,” said Gbolahan Ologunro, equity research analysts at CSL Stock Brokers Limited.
Access Bank has been reeling with huge operating expenses after it acquired tier 2 lender Diamond in a synergy that catapulted it to becoming the largest bank by total assets in Africa’s largest economy.
The Nigerian lender expended more on staff as its annualized cost per head stood at N3.34 million, that compares with Zenith Bank (N3.03 million); Guaranty Trust Bank, (N2.63 million), and United Bank for Africa (N1.60 million).
An employer’s personnel costs constitute all the money spent by an employer on its employees. Access Bank’s total operating expenses spiked by 63.77 percent to N90.31 billion as at March 2020, that compares with Zenith’s (+31.44 percent); Guaranty Trust Bank, (+31 percent), United Bank for Africa, (+29.23 percent).
Access Bank Plc. recorded a profit after tax of N40.9 billion in the first quarter period ended March 31st, 2020.
This was bolstered by an increase in Net interest income which stood at N72.2 billion, indicating a 27 percent increase compared to N56.8 billion that was recorded in Q1 2019.
Its shares closed at N6.33 as at 2:00 pm Lagos, valuing it at N231.04 billion.