Nigerian stocks rose 1.84% to a five-week high on Thursday, powered by demand for stocks in the relatively liquid banking sector.
The index, which is down 16% so far this year, rose on Thursday to a level last seen in October, as Nigeria’s top 10 banking shares soared 7.04%.
Access Bank, which completed a takeover of local rival Diamond Bank in April, gained 9.6%. Access is up 43% year to date.
Naija247news earlier reported that Access Bank Plc, Nigerian biggest lender, plans to open operations in four additional African countries in the next year, following its takeover of Transnational Bank Ltd. of Kenya.
“By this time next year we would probably have added about four more subsidiaries, most of them greenfield,” Chief Executive Officer Herbert Wigwe said Wednesday on investor-conference call from Lagos, Nigeria’s commercial capital.
South Africa, Angola, Mozambique, Senegal, Liberia and Ivory Coast are among countries being considered for the setting up of subsidiaries, representative offices or partnerships, he said. The institution plans to be present in 22 African countries, according to a presentation on its website. It currently operates in Sierra Leone, Gambia, Congo, Ghana, Nigeria, Rwanda and Congo.
Access Bank acquired rival Diamond Bank early this year as it sought to expand retail penetration in its home market. The lender is acquiring 97% of Transnational Bank and said it will inject more equity into the institution to meet the needs of its clients in the east African hub.
“By the end of the second year we will start to see a return on equity that is close to 20%,” Wigwe said of Transnational Bank.
The Lagos-based lender will decide whether to issue a fresh Eurobond before its $300 million debt matures in 2021, Wigwe said.
“We are careful as to what going to the market means in terms of cost,” he said. “We will approach the market at the appropriate time.”