Nigeria’s Access Bank to Raise Extra $88 Million of Debt in 2019

LAGOS (Capital Markets in Africa) – Access Bank Plc, which obtained a $162.5 million loan last month to boost its capital and fund operations, will raise additional $87.5 million this year, its chief executive officer said.

The fund will qualify as tier-two capital and will be needed to strengthen operations following merger with rival Diamond Bank Plc, CEO Herbert Wigwesaid Wednesday on an investor call in Lagos, Nigeria’s commercial hub. Access Bank acquired Diamond Bank last month in a deal worth about $200 million as it seeks to expand its operations in an economy that rivals South Africa as the continent’s biggest.

The lender’s ratio of non-performing loans to total credit rose to 10 percent in March from 2.5 percent in December, after the merger of the loan books of the two banks, Wigwe said.

Steps that Access will take to improve the ratio to the pre-merger level include increasing recoveries. Diamond Bank had 787 billion naira ($2.2 billion) in loans at year-end, with 34 percent classified as non-performing, Wigwe said.

The lender’s capital-adequacy ratio declined to 19.1 percent by March 31 from 19.9 percent at year-end, according to the bank’s presentation.

Source: Bloomberg Business News