Over $300 million has been invested in Access Bank by its parent company, Access Holdings, to further strengthen the lender amid a series of acquisitions by the Nigerian bank.
In a statement released on Tuesday, Access Holdings said part of the $300 million was to boost Access Bank’s total capital ratios, which is a measure of how much capital a bank has available to withstand a certain amount of capital losses before being at risk of bankruptcy or becoming insolvent.
This comes at a period two major banks in the United States, Silicon Valley Bank and Signature Bank went insolvent or bankrupt, and fear of Credit Suisse collapsing in Switzerland.
Access Holdings handed fresh capital to increase Access Bank’s liquidity to shelter the commercial bank against any untoward wind.
In the statement, Access Holdings said the investment was expected to improve Access Bank’s “total capital ratios.”
Access Bank has been splashing capital on a series of acquisitions, which is expected to burden the lender’s capital base.
It acquired African Banking Corporation in Mozambique, Grobank Limited in South Africa, as well as Cavmont Bank Limited in Zambia.
The lender is also in talks to acquire Finibanco Angola S.A. and the African Banking Corporation subsidiary in Botswana and will use part of the $300 million to finance its African expansion strategy.
“Access Holdings Plc (“Access Holdings”) is pleased to announce its completion of a US$300 million (Three Hundred Million United States Dollars) capital investment into its flagship subsidiary, Access Bank Plc (“Access Bank” or “the Bank”) (‘the Investment’), the proceeds of which will supplement the capital needs of its African expansion strategy.
“Over the years, the Bank has made significant strides towards attaining strong market presence in the key trade and payments corridors across the African continent.
“The Investment takes the form of a Tier 1 capital qualifying Mandatory Convertible Instrument and is expected to improve the Bank’s shareholders funds and total capital ratios. The Central Bank of Nigeria has approved the Investment,” Access Bank wrote in the circular.
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