By G9ija

Having received regulatory approval to acquire a controlling stake in South Africa’s Grobank, Nigeria headquartered Access Bank has outlined plans to rename the lender and expand its trade finance business.

The South African Reserve Bank (Sarb) announced last week that it had signed off on the transaction, which is set to be completed in Q2 2021 and will see Grobank rebranded as Access Bank (South Africa).

Access Bank group managing director and CEO, Herbert Wigwe, told CNBC Africa that the deal will be comprised of US$60mn in tier 1 and tier 2 capital, and that the plan is to boost Grobank’s trade finance capabilities.

“Grobank has been building its strength in the agri-sector… but over the next couple of months we will expand and do more trade finance, and support other banks and institutions out in South Africa – particularly those that can’t connect to the rest of the continent,” Wigwe said.

He added: “South Africa is responsible for most of the trade across southern Africa, and a large part of East Africa, where we already have a presence… We will deploy a large part of our trade finance lines across those markets and it should be profitable.”

When the deal was announced in September 2020, Grobank CEO, Bennie van Rooy, said that the agreement would lead to a “broader focus and ability to serve a number of other industries alongside its [Grobank’s] current focus on the food value chain”.

Sarb notes in a statement announcing its approval of the deal that the transaction is in the “best interest” of both Grobank and its existing depositors.

“This change of ownership of Grobank has been, in part, facilitated by the Prudential Authority and Grobank management to protect and safeguard the bank and its depositors during what has been a difficult period for the bank,” Sarb says in a statement.

GCR Ratings downgraded Grobank’s national scale issuer rating to BB in November, commenting that “revenue stability has been weak over the past 3-5 years as the bank continues to post losses on the back of limited funding and capital for growth”.

GCR added that the expected acquisition by Access Bank would “recapitalise the bank and alleviate regulatory risk”.

Having launched in 1989, Access Bank has built up its footprint across the African continent, the UK and Asia.

The bank notes in its 2020 annual report that it will transition into becoming a holding company structure, having received approval in principle from the Central Bank of Nigeria.