Access Bank to merge with Intercontinental

Nigeria's Access Bank says it will merge with local peer Intercontinental Bank, one of nine lenders rescued in a US$4billion central bank bailout 18 months ago.

The two have signed a Memorandum of Understanding (MOU) for the purpose of business combination of both institutions, which will result in the emergence of one of Africa's largest financial institutions.

The MOU signing follows the completion of a competitive, rigorous and transparent selection process and the approval of the Board of Directors of both banks.

In accordance with international best practices, the process will be subject to necessary shareholder, regulatory and judicial approvals.

When reached for his comment, the MD for Access Bank (Ghana) Ltd, Yomi Akapo, explained: “The MOU announcement is a declaration of intent by both banks to combine their businesses. In transactions of this nature, there are processes and key steps that will necessarily follow an MOU signing. There are several regulatory, and shareholder approvals that must be obtained, and we will communicate further periodically as the process progresses.”

Access Bank Chief Executive, Aigboje Aig-Imoukhuede, said the two institutions are a perfect match but gave no details on the terms of the deal, which still needs approval from the central bank and Securities and Exchange Commission.

"These are two organisations that share potential synergies and are very complimentary in terms of what is strong in one is not strong in the other," Aig-Imoukhuede said.

"This is an ideal ground for a value-adding business combination," he said.
The combination of Access Bank Plc and Intercontinental Bank Plc is of systemic importance and safeguards a significant degree of capacity in the Nigerian banking sector that would otherwise be lost in the event of non-resolution of any of the rescued banks, said a statement jointly issued by the two banks.

Critically, the Transaction provides a safe harbour for the depositors of Intercontinental Bank Plc and the seamless continuation of banking services to Intercontinental Bank's considerable customer base.

The resulting footprint of the combined entity and its increased access to low-cost deposits combined with Access's recognised competence in commercial banking, robust balance sheet and proven track-record, supported by a culture of strong corporate governance and risk management, will create a market-leading platform from which the combined entity can capitalise on growth opportunities.

The business combination will offer unique opportunities for both institutions. The Retail banking operations of Intercontinental Bank coupled with the Wholesale and Commercial banking strength of Access Bank offers a high degree of synergy and complementarity that is unique in the Nigerian banking environment.

The synergy from combining the two banks will therefore create a formidable competitor with scale to rival the top banks in the industry.


Access Bank Plc continues to be a remarkable story of transformation and phenomenal accomplishment considering its antecedents. The Bank has through a combination of inorganic and organic growth spread its tentacles and consolidated its footing on the Nigerian banking landscape over the last 10 years, to rank among the top-10 Banks in the Nigerian banking industry.

After taking over the Old Access Bank in the year 2001, Access Bank Plc acquired Marina Bank and Capital Bank (the former Commercial Bank (Crédit Lyonnais Nigeria) by merger to increase its coverage in Nigeria.

In 2006, the Bank began an intelligent expansion in 8 other countries across sub-Saharan Africa’s three monetary zones (WAMZ, SADC and UEMOA) which saw acquisitions in Omnifinance Bank, Banque Privée du Congo and Bancor SA in Rwanda among others.

It therefore comes as no surprise that Access Bank has taken advantage of the current inorganic growth opportunities to create a combined entity that will rank in the Top 3 in the Nigerian banking sector by Gross Earnings and Total Assets.

The combined entity is also expected to capitalise on growth opportunities across the markets in which the Bank operates, resulting in a formidable competitor to other African tier-one banks

Intercontinental was established in 1989 as a pure merchant bank and converted to commercial banking just over a decade later. It grew to become a major player in sub-Saharan Africa's second-biggest economy, at one point being the country's largest bank by Tier 1 capital.

At the end of last year, its shares were 86 percent free float and 14 percent held by the directors.

Central Bank Governor Lamido Sanusi praised for the 2009 bailout and efforts to sanitise the banking system, which was dangerously close to collapse.

The removal of several bank chiefs - including former Intercontinental chief executive, Erastus Akingbola, for lax oversight and reckless lending - sent shockwaves through a corporate elite that had grown used to impunity.

Intercontinental is the second of the rescued lenders to announce an agreement with new investors after Union Bank said late on Tuesday it had agreed a US$750million deal with a consortium led by African Capital Alliance private equity firm.

Rescued lenders Afribank, Bank PHB, Finbank and Oceanic Bank have also held talks with potential investors in recent months.

source:B&FT