Access Holdings reached a binding pact to buy a majority stake in Afrasia Bank, a commercial bank worth over $5.7 billion in assets located in Mauritius, an island country off the southeastern coast of East Africa.
Access Bank UK Limited, a subsidiary of the financial services group, executed the transaction on behalf of its parent company, Access Holdings said in a statement Thursday morning.
The development comes barely five weeks after West Africa’s largest lender’s receipt of the go-ahead to set up a subsidiary in Namibia.
Afrasia Bank, which has a representative office in South Africa, posted a net profit of $152.4 million for the fiscal year ended 30 June 2024 and is Mauritius’s fourth biggest bank.
“This acquisition marks a pivotal moment in our African growth strategy, reinforcing our position as a leading pan-African financial institution,” said Access Bank CEO Rosevelt Ogbonna.
“Mauritius offers immense potential as an international financial hub, and through Afrasia Bank, we are excited to unlock new opportunities to drive trade, support businesses and foster economic inclusion across the region as we continue the vision to be the World’s Most Respected African Bank.”
The bank hopes the Mauritian foray to position itself for trade finance and regional connectivity, boosting its potential to facilitate cross-border transactions across the continent and beyond.
The banking holding company has stated its ambition to harness the African Continental Free Trade Area to deepen intra-African trade and scale on its road to becoming one of Africa’s top five banks by 2027.
It has set itself the ambitious goal of being among the top ten banks in every market it operates in.
Rather than concentrating on shareholder rewards in the short term, the corporation is taking the long view by committing the bulk of its resources to international expansion, with over 70 per cent of equity going into banking acquisitions within Africa and diversification into promising sectors within financial services.
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“With a strong balance and a well-established brand in Mauritius, Afrasia Bank provides us with us with sustainable platform to scale and achieve long-term profitability,” said Access Bank UK CEO Jamie Simmonds.
“The deal aligns with our strategy to diversify and future-proof our earnings and offer bespoke solutions enabling our clients to access global markets with ease,” he added.
Access Holdings plans to issue two tranches of dollar-denominated bonds soon to fund its expansion aspirations and partly meet the new capital requirements in its base in Nigeria.
While the first tranche is targeting individual Nigerians with the recently issued Nigerian Government diaspora bond serving as a template, the second tranche to be issued by next June is seeking development finance institutions as investors.
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