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Access Bank Completes Acquisition of African Banking Corporation (BancABC Mozambique)

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Herbert Wigwe - Investors King

Access Bank Plc, a leading bank in Nigeria and across Africa, has completed the acquisition of African Banking Corporation (BancABC Mozambique), a subsidiary of London Stock Exchange-listed group, Atlas Mara Limited.

According to Access Bank Plc, Access Mozambique will now move towards integrating and merging BanABC Mozambique into its operations, which is expected to create the seventh-largest bank in the Mozambique banking market.

Speaking on the acquisition, Herbert Wigwe, GMD/CEO, Access Bank, said “We are pleased with the completion of this acquisition which significantly strengthens our banking franchise in Mozambique and represents a transformational step in our growth plans in the country and the broader Southern Africa region.

“We are building the scale necessary to compete effectively and efficiently in key African markets outside Nigeria and ensure we sustainably deliver strong return on invested capital in our African expansion.

“Scale is an important contributor to returns and this transaction is consistent with our rigorous efforts to create a strong presence with scale across Africa, and in line with our vision to be the World’s Most Respected African Bank.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Banking Sector

African Development Bank Group President Akinwumi Adesina Assures Nigeria of Bank’s Strong Support to Achieve Food Security

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The President of the African Development Bank Group, Dr. Akinwumi Adesina, received a high-level Nigerian delegation led by the country’s Minister of Agriculture and Rural Development, Dr. Mohammad Mahmood Abubakar on Monday.

The meeting follows on the heels of an address by Dr. Adesina last week at a mid-term ministerial retreat presided over by President Muhammadu Buhari.

Dr. Adesina and the Nigerian minister discussed means of tackling growing concerns about the country’s food security.

Adesina said the Bank’s strategic support for Nigeria’s food production would be hinged on five factors: support, scale, systemic, speed, and sustainability.

He added, “I want to assure President Buhari that the African Development Bank will provide his government with very strong support to tackle the country’s food security challenges.”

“Inflation in Nigeria is high, at 16% or more. Of course, the biggest share of the consumer price index is the price of food, at almost 65%. So, if we can drive down the price of food, of course, we can drive down inflation.“

Adesina urged the Nigerian minister to concentrate on building the correct team and tactics to optimize the country’s farming seasons. He said that dramatically increased food output will result in lower food prices, which will in turn lower inflation rates.

Abubakar said his consultative mission to Abidjan was at the instruction of President Buhari.

“Our mission is to examine ways Nigeria could enhance food production, lower food prices, and create wealth,” the minister said.

Abubakar welcomed the Bank’s proposed strategy and described it as a landmark one that would spur Nigeria’s food supply production. “It will reverse the ugly trend of a sharp increase in prices of food in the country. I am pleased with the Bank’s strategy to facilitate the production of 9 million metric tons of food in Nigeria and to support us in raising self-sufficiency. The Bank’s Special Agro-Processing Zones initiative is a laudable one and Nigeria is grateful.”

Citing successes in Sudan, Adesina explained how the African Development Bank had supported the country with 65,000 metric tonnes of heat-tolerant wheat varieties, cultivated on 317,000 hectares.

“It took two seasons to do this,” he said. “Change will not happen in years. You will see changes in seasons. Sudan now produces 1.1 million metric tons of wheat. The same thing happened in Ethiopia in just two seasons with the production of 184, 000 hectares of wheat,“ he added.

In response to Bank successes in Sudan and Ethiopia, Abubakar said: “This gives me an additional measure of confidence. If you can do it in Sudan, you can equally do it in Nigeria. Not just in wheat, but also rice, maize, and soybeans.”

The African Development Bank will provide Nigeria with support through input delivery, including highly improved seeds and fertilizers to farmers, and an integrated input delivery platform.

Extensively discussed at the meeting was the Bank’s Special Agro-Industrial Processing Zone initiative as an effective medium-term plan for revolutionizing Nigeria’s agriculture value chain.

Adesina said: “The task, responsibility, and challenge of feeding Nigeria rests on your shoulders. You will receive maximum support from me, and the African Development Bank for the responsibility that President Buhari has given you. You will not be alone.”

He added: “The Bank stands ready to fully support and help Nigeria in the next farming seasons. So, we must make sure things turn around. The president must succeed, and Nigeria must succeed. Agriculture must succeed.”

Abubakar thanked the African Development Bank for its support and said the meeting gave him reassurances of what Nigeria can achieve with the Bank’s support in the farming seasons ahead.

The minister also called for the Bank’s support to recapitalize the country’s Bank of Agriculture. Both parties set up a task force team to develop a plan for accelerated implementation within the next 60 days.

Also at the meeting were a member of Nigeria’s National Assembly, Hon. Munir Baba Dan Agundi, Chair of the House Committee on Agricultural Colleges and Institutions;  the African Development Bank’s executive director for Nigeria,  Sao Tome and Principe, Dr. Oyebode Oyetunde; Vice President of Agriculture, Human and Social Development, Beth Dunford; Senior Special Advisor to the President of the Bank on Industrialization, Professor Oyebanji Oyelaran; Director General of the Bank’s Nigeria Country Office in Abuja, Lamin Barrow; the Bank’s Director of Agriculture and Agro-Industries, Martin Fregene; the Director for Agricultural Finance and Rural Development, Atsuko Toda; and senior officials from Nigeria’s Federal Ministry of Agriculture.

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Banking Sector

Fidelity Bank Empowers Entrepreneurs to Play Big In The Non-Oil Export Market

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For developing countries such as Nigeria to accelerate economic growth, there needs to be greater private sector participation in their export sectors. This was made known by Isaiah Ndukwe, Divisional Head, Export and Agriculture, Fidelity Bank PLC, at the just concluded 11th edition of the Fidelity Bank Export Management Programme (EMP 11).

Held at the Lagos Business School, from the 4th to 8th of October 2021, the programme, covered a wide range of topics including export documentation and application of export development processes and was facilitated by leading faculty from Lagos Business School, staff of the Nigerian Export Promotion Council (NEPC) and experts in financial management and exports.

“Year-in, year-out, Fidelity Bank has demonstrated its resolve to help diversify the Nigerian economy and increase export earnings. One of the ways we are doing this is through the Export Management Programme which provides participants with the knowledge needed to navigate both the international non-oil export market and the larger export market,” explained Mrs. Nneka Onyeali-Ikpe, Managing Director, Fidelity Bank PLC when tasked on the rationale behind the programme.

The importance of exports has continually been emphasized by various bodies as it provides a means of increasing the markets for producers and especially in Nigeria’s case, an opportunity to attract much-needed foreign exchange earnings. In fact, Akinwunmi Adesina, President of the African Development Bank (AfDB), speaking recently at the Mid-term Ministerial Performance Review Meeting on the topic: ‘Nigeria’s Economic Resurgence: The African Experience’ expressed worry over disincentives to non-oil exports in the Nigerian economy. He, therefore, urged Nigerian fiscal authorities to remove bottlenecks in non-oil exports in order to promote economic resurgence.

One of the participants of the EMP 11, Mr. Kelechi Chukwukezirim, Chief Executive Officer of Dot Global Resources Nigeria Ltd said, “I am thankful to Fidelity Bank and Lagos Business School for this insightful and highly educative program. I came here with just an awareness of export management. However, my experience in the past five days has taken me from point zero to over 40% of quality knowledge on export management. I have enthused at the network and platform this program created that I could leverage going forward. I am excited at what the future holds in this regard”.

According to Mrs. Onyeali-Ikpe, “Previous editions of the EMP have recorded outstanding successes and made marked impacts in the lives and businesses of the participants. We are proud to say that the just-concluded eleventh edition is no exception. The feedback we have gotten from facilitators and participants alike has been nothing short of encouraging. The turnout was tremendous and we are certain that we will witness astonishing results as the participants put what they learned into practice.”

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Banking Sector

Combined Market Cap of Largest US Banks Jumped to Nearly $1.4T, an 80% Increase YoY

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The largest banks in the United States reported blockbuster second-quarter results after the pandemic loan losses didn’t happen and the US economy began roaring back to life. Moreover, the banks’ stock also significantly recovered since the beginning of the year, rising high above the pre-pandemic levels.

According to data presented by BuyShares, the combined market cap of JP Morgan Chase, Bank of America, Wells Fargo, Morgan Stanley, and Citigroup, as the five largest banks in the United States, jumped to nearly $1.4trn last week, showing a massive 80% increase year-over-year.

Double-Digit Growth After Hard 2020

There are several reasons why the US banks have outperformed the analysts’ estimates and turned 2021 into a year of significant recovery. First, consumer spending in the country has climbed significantly, in some sectors even beyond pre-COVID-19 levels. Second, credit quality has also improved while savings and investments have risen. Moreover, a national vaccination roll-out has allowed Americans to get back to work and start spending again.

These circumstances had a major influence on banks’ profitability driving their stock price to new all-time highs. For example, according to YCharts data, the market cap of JP Morgan Chase, as the largest bank in the United States and globally, jumped by $205bn in the last year.

In September 2020, the combined value of shares of the US megabank stood at $293.5bn. Over the next six months, this figure jumped to $465bn and continued rising. Statistics show that JP Morgan Chase’s market cap hit nearly $500bn last week, a massive 70% increase compared to January figures.

Bank of America, as the second-largest bank by market cap, witnessed even bigger growth. Over the last twelve months, the combined value of shares of the US multinational investment bank surged by $153.8bn or 73%, reaching $362.5bn last week.

Still, that was nothing compared to the stock price growth of Wells Fargo, which market cap almost doubled in this period. In September 2020, the combined value of shares of the third-largest US bank stood at $97.2bn. Statistics show this figure surged by 98% since then and hit $193bn last week.

Morgan Stanley’s Market Cap Soared by 153% YoY, the Biggest Increase Among the Top Five Banks

Although far behind the top three US banks in terms of market cap, Morgan Stanley witnessed the biggest stock price growth last year. In September 2020, the combined value of shares of the New York-based financial services corporation stood at $74.5bn. By the end of the year, this figure jumped by 55% to $115.7bn.

However, 2021 witnessed even more impressive growth. Statistics show that over the last ten months, the market cap of the fourth-largest bank in the United States surged by another $73bn and hit over $188bn last week, revealing an impressive 153% increase year-over-year.

The YCharts data revealed that Citigroup witnessed a 54% market cap growth in this period, the smallest among the top five US banks. Between January and October, the combined value of shares of the US bank jumped by $51bn or 54%, reaching $144.3bn last week.

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