Nigeria’s Access Bank expects its retail banking business to turn to profit this year, contributing up to 10 percent to profit before tax next year and 20 percent by 2018/19, Chief Executive Herbert Wigwe said on Tuesday.
Wigwe said most of its 350 branches would become profitable this year after it regained market share following the acquisition of rival lender Intercontinental Bank three years ago.
“Before the end of 2018/19 we would see what would be a 20 percent contribution from retail,” Wigwe told Reuters in an interview in Lagos, referring to profit before tax.
However, he said the lender was cautious about creating risk assets this year and was targeting 10 percent loan growth due to domestic market conditions and high interest rates.
It grew loans 20 percent last year.
Two years ago, the top tier lender said it aimed to grow its customer base to between 15 million and 20 million across its African markets by 2018, from around six million, as it shifted its focus to retail banking.
The bank, which jumped to fourth position out of 21 Nigerian lenders from ninth in 2007, said it expected to sign on two million customers and another two million through its cards product, Wigwe said.
Access Bank shares, which fell 24.2 percent last year, ended flat at 5 naira on Tuesday.
Wigwe said the bank successfully concluded a rights issue despite low sentiment in the stock market and foreign investors’ apathy due to worries over the naira currency amidst lower oil prices which slashed government revenues.
He declined to give further details pending the approval of the offer by regulators. Access Bank launched a cash call last November to raise 68 billion naira from existing shareholders.
Nigerian lenders have been shoring up their balance sheets in preparation for the adoption of stricter international capital requirements, which would otherwise see capital ratios for most of them drop by between 100 and 400 basis points.
Rival lender Stanbic IBTC said on Tuesday it aimed to carry out a 20.4 billion naira ($102.6 million) rights issue this year and seek shareholders’ vote to distribute a scrip dividend to boost its capital base.