The Zambian unit of Access Bank Group has signed a deal that will see it merge with Cavmont Bank, the latest in a series of mergers and acquisition deals involving the Nigerian banking group over the past two years.
The combined bank, which will be a majority-owned subsidiary of Access Bank Plc, is expected to become a top 10 lender in Zambia. It will boast a strong capital base of more than ZMW600 million, which significantly exceeds the capital requirement for foreign-owned banks under the regulations of the central bank.
“The merger will increase our scale and improve our operating leverage by enabling us to deliver our existing retail and wholesale offerings to a wider base of customers in Zambia while positioning the bank for growth in the long-term trajectory for the country,” said Joana Bannerman, Access Bank Zambia Managing Director.
Access Bank will be looking to leverage on Cavmont’s strong retail, commercial and Small and Medium Enterprises loan capability, as well as a presence across seven provinces in Zambia, offering its customers a wider branch network, the group said in a statement.
The transaction is scheduled to close Q4 2020 and is subject to the meeting of various conditions precedent which includes Cavmont Capital Holdings Zambia (parent company of Cavmont Bank) shareholder approval, relevant regulatory approvals, and the local and regional competition commission authorities.
Access Bank Zambia is a subsidiary of one of the largest banking groups in Africa with a strong track record of post merger integration. It has overseen a number of continental expansion deals that include last month’s completed acquisition of Kenya’s Transnational Bank Plc., following an earlier announcement in October 2019 as well as its receipt of full regulatory approvals and fulfillment of all conditions precedent to completion.
“The Bank’s vision is to be the World’s Most Respected African Bank and our entry into the Kenyan market, a gateway in East Africa, not only brings us closer to that vision but enables our customers to tap into our extensive global network,” the bank said in a corporate disclosure on the Nigerian Stock Exchange.
Prior to that, the bank last year finalized a $235 million “strategic merger” with Diamond in its home country, which saw the latter transfer all its assets, liabilities, and undertakings to Access. The transaction, part of Access Bank’s 5-year strategic plan for continental expansion, birthed what is now the largest bank in Africa by customer-size and one of Nigeria’s top-tier lenders with a strong capital base.