Access Bank Not Issuing Any Eurobond in 2019

By Dipo Olowookere

Few days ago, Ecobank, a company trading its securities on the floor of the Nigerian Stock Exchange (NSE), announced the issuance of a $450 million Eurobond.

It was the first time a Nigerian lender was selling the debt instrument in almost over 17 months with the last exercise carried out by Fidelity Bank in October 2017.

According to Ecobank, the exercise was oversubscribed by investors drawn across the globe, especially from the Europe, Asia and Africa.

On March 19, 2019, Access Bank and Diamond Bank officially merged together, with the enlarged company starting full operations on April 1, 2019.

Before the merger, precisely in 2014, Diamond Bank issued a $200 million 5-year Eurobond at 8.75 percent. The notes are expected to mature next month.

Access Bank, which now controls the assets and liabilities of the defunct Diamond Bank, has promised to settle the bondholders at maturity.

With the recent Eurobond raised by Ecobank, observers are of the view that more banks may have to approach the international debt market to raise fund to improve their performance.

But one lender that is not looking in that direction at least this year is Access Bank, which raised N15 billion last month through a green bond.

The financial institution disclosed recently that it would not approach the international debt market to raise any fresh capital. For now, the company wants to focus on making its shareholders enjoy the dividend of its merger with Diamond Bank, a tier two bank in the country.

Addressing an analyst call last week for its Q1 2019 earnings, an official of the financial institution confirmed that such was not on the agenda for now.

“On the Eurobond, [it would] not [be issued] in 2019 [because] there is no conversation around coming into the market in 2019.

“We are [presently] focused on paying down the maturities [of Diamond Bank] in May and [for Access Bank in] June 2019,” the bank official told analysts at the call.

In its Q1 2019 results, Access Bank grew its post-tax profit by 86.1 percent to N41.148 billion from N22.116 billion, while its pre-tax profit went up by 64.4 percent to N45.101 billion from N27.439.

In the period under consideration, the bank improved its interest income rose to N95.142 billion from N87.238 billion, while the net interest income to N56.838 billion from N44.654 billion.

However, the fee and commission income dropped to N15.628 billion in Q1 2019 from N15.862 billion in Q1 2018.

In the results, Access Bank posted a net foreign exchange gain of N6.211 billion against the net foreign exchange loss of N6.821 billion in the same period of last year.

It was also disclosed that the earnings per share (EPS) of Access Bank grew to N1.39 in the first quarter of 2019 from 77 kobo printed in the first quarter of 2018.