Access Bank’s shareholders to consider restructuring to HoldCo December 16

Shareholders of Access Bank Plc, Nigeria’s leading bank will be presented with the scheme of arrangement to restructure the bank to a holding company for approval at the Court-Ordered Meeting on December 16, 2021, bank said in a notice at the Nigerian Exchange last week.

The notice said the meeting will be held at Access Bank Plc’s Head Office.

Specifically, the restructuring is proposed to be implemented through a scheme of arrangement pursuant to the provisions of Section 715 of Ompanies and Allied Matters Act (CAMA) and the SEC Rules and Regulations,” the notice said.

If the Restructure is approved, the restructured group will have a structure like that of some major global financial institutions, including those that Access Bank considers to be its peers and competitors.

The Board expects that the restructured group will have greater flexibility to adapt to future business opportunities, market and regulatory changes than is currently the case.

The restructure according to the bank will result in Shareholders holding shares in the Holdco in the same proportion as their current holdings in the Bank and the Bank’s shares being held wholly by the Holdco, which will be a regulated entity for CBN purposes.

The Bank will continue to be subject to the full suite of CBN banking regulations and, in all other material respects.

Also, the Banking Subsidiaries will continue to be subject to the oversight of the respective prudential regulatory authorities in their jurisdictions. The Group’s firm-wide risk management framework will continue to apply across the entire restructured group.

Dr. (Mrs.) Ajoritsedere Awosika, Chairman, Access Bank Plc in a letter to the shareholders justified the restructuring exercise saying, “Access Bank intended to transition to a Financial Holding Company in line with seven  main considerations which include Regulatory compliance.”

The HoldCo structure ensures full compliance with CBN’s Regulation on the Scope of Banking Activities and Ancillary Matters (Regulation 3), 2010, (which repealed the Universal Banking Guidelines and limited the ability of banks to undertake non-banking business), and Guidelines for Licensing and Regulation of Financial Holding Companies in Nigeria, 2014; Facilitation of growth and expansion in banking across Africa: Due to its oversight function, the HoldCo structure will facilitate the business growth of the banking group and expansion of services into underpenetrated regions in Nigeria, Africa and beyond.

Other considerations  include diversification into permissible financial services: The HoldCo structure will enable Access Bank to diversify its business portfolios into new areas within the financial service industry that are permissible by the CBN HoldCo regulation; Risk management: The HoldCo structure would ring fences each business from the risks of the other, by preventing the business performance of one business from affecting the performance and valuation of another, Accordingly, under the HoldCo structure, the assets of the bank are ring-fenced from the nonbanking businesses; Ease of funding: The HoldCo structure will facilitate a consolidated financial strength of the Group, which will improve access and ability to raise capital with benefits including lower transactions costs, amidst others;  Capital allocation: The HoldCo structure will expedite capital and liquidity, and provide flexibility to accommodate leverage with minimal risk to regulatory ratios; and Speed of decision making: This structure would unburden the Bank from oversight functions and responsibilities of managing the subsidiaries and ensure the Bank is solely focused on its core operations. This fosters faster decision-making and business growth.

“The Board considers the Restructure to be the most appropriate approach to create greater strategic flexibility and diversification of the Group’s revenues,” she said.

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