Dr Akintola Omigbodun
The 2012 annual report and accounts of Access Bank Plc show that the merger of Intercontinental Bank Plc with Access Bank Plc was completed during 2012. The process of acquisition of Intercontinental Bank Plc started in 2011 when Project Star Investment Limited, acting for Access Bank Plc, invested N50 billion in Intercontinental Bank Plc as 75% of the share capital of Intercontinental Bank Plc.
The absorption of Intercontinental Bank Plc has improved the fortunes of Access Bank Plc significantly. The bank’s customer base has grown from about 1.5 million in December 2011 to about 6.0 million in December 2012. The total number of the bank’s shareholders has increased from 425,581 at the end of December 2011 to 841,397 at the end December 2012.
Of the total at December 2012, the annual report at page 92 shows that 1716 shareholders each of whom owns 500,001 units and above account for 78.07% of the issued shares, 19,283 shareholders each of whom owns between 50,001 and 500,000 units of shares account for 10.63% of the issued shares while 820,398 shareholders each of whom owns 50,000 units and below account for 11.3% of the issues shares. Significantly, Stanbic Nominees Nigeria Limited in its capacity as custodian holds 26.03% of the issued shares while Blakeney GP holds 6.45% of the issued shares.
The absorption of Intercontinental Bank Plc by Access Bank Plc is fallout of the market crash of 2008 and the intervention of the Central Bank of Nigeria, CBN, in some banks in 2009. How should we access the performance of Access Bank Plc post the 2008 market crash? Access Bank Plc had a public offer in 2007 at a price of N14.90 per share. Net assets per share at time of the 2007 offer were N4.07 while net assets per share at 31 December 2012 were N10.53.
There has been a bonus share issue of 1 new share for every existing 10 shares held by each shareholder in June 2010 while there was a special distribution of 4 new shares for every existing 25 shares held by an Access Bank shareholder at the merger with Intercontinental Bank Plc. The effect is that a purchase of 1000 units of shares for N14, 900 in 2007 would currently give 1276 units of shares worth about N14, 036.
Access Bank Plc also intends to distribute the shares it holds in Wapic Insurance Plc. One wonders whether 800,000 plus shareholders would not be too many for this insurance company. From the analysis of shareholding shown earlier, 11.3% of the shares to be distributed will go to 820,398 Access Bank shareholders. A large number of shareholders in this group do not have investor’s accounts with the Central Securities Clearing System, CSCS, Plc. Wapic Insurance Plc will therefore have to issue physical share certificates for such shareholders.
There was a noticeable drop in the bank’s profits when its first quarter 2013 results were announced. The bank did not offer any explanation for this drop. However, there have been reports of a default in respect of one of the bank’s loans to the oil and gas sector. There has been reported litigation in respect of one particular loan and one suspects that the bank has had to make substantial provisions for this loan.
Judgment has been given at the Federal High Court in respect of a fundamental human rights enforcement action brought by one of the persons involved in the loan saga. An examination of the court processes and documents filed in respect of this fundamental human rights enforcement action would lead one to conclude that resolution of the issues arising from this loan would take some time.
There exists an opportunity now for Access Bank Plc to make an effort to reach all its shareholders. The bank at page 99 of the annual report states that all shareholders are treated equally, regardless of the size of their shareholding and social conditions. The bank has in the past two years indicated it would send annual reports to shareholders in CD-format. My family interests have not received the annual report in CD-format and the bank has not sent me the report in paper format which I filed a request for.
The savings deposits held by the bank leapt from about N20 billion to about N150 billion at the acquisition of Intercontinental Bank Plc. The pronouncements from the CBN after the recent Monetary Policy Committee meeting suggest that the CBN may be moving towards the position of the 1970s when all government deposits were kept in accounts at the CBN.
Banks would now be required to raise deposits from sources other than the government. Access Bank shareholders should be encouraged to open savings accounts with the bank at an interest rate that carries a premium. Shareholders should be asked to bring in other depositors to open savings accounts at the same premium rate for shareholders.