Why Access Bank Mops Up Over 229.50m Shares Ahead Shareholders’ Meeting
Ahead of planned shareholders’ meeting next Tuesday, Novemeber 29, the Group Managing Director, Access Bank Holdings Corporation (ACCESSCORP), Herbert Wigwe, has mopped up about 229.5 million units of the shares of the bank, a development that market operators described as demonstration of absolute confidence in the lender’s return on equity (ROE).
At an average price of N8.08 per unit, the transaction amounted to a total sum of N1.9 billion exchanged in six tranches of shares purchase deals, sealed between November 4 and 15, 2022.
On November 4, Wigwe bought 38.75 million units of Access Bank shares at N7.95 per unit, a transaction which the leading Tier 1 lender disclosed to the Nigerian Exchange in a filing on November 7 in line with regulatory requirement.
In another filing on November 9, ACCESSCORP disclosed that the Group CEO purchased 37.5 million units of the bank’s equity at a unit price of N8.1, and the deal was sealed on November 8.
In a similar deal on November 10, equal volume of shares were crossed to the ACCESSCORP boss at a unit price of N8.05, and on November 14, he further increased his stakeholding with additional 38.75 million units snapped up at uniot price of N8.15
Analysis of market activities last week showed that ACCESSCORP was the most traded equity on Nigerian Exchange with over 74.5 per cent or 110.7 million units of the total 138.9 million units of equities traded.
On Friday, November 18 the stock closed at N8.10 per share about 8 per cent above its 52-week low of N7. 50 per share set on Oct 26, 2022. It had recorded a high of N8.45 per share on April 12, 2022, but analysts insist that it was traded at discount, projecting a fair price of about N15 per share in view of its fundamentals.
With market capitalisation of N376.35 billion, the Nigeria-based financial holding company principally hold the investments (directly or indirectly) in financial and nonfinancial institutions.
The HoldCo has issued share capital of 35.55 billion with earnings per share valuation set at N4.86 and price earning (P/E) ratio of 1.67. In preceeding financial year 2021, the company had paid a dividend of N1.15 per 50kobo share, indicating annual dividend yield of 11.11 percent considering its significant improvement in bottom and top line financials.
In its 2021 full-year financial result, the lender recorded a profit after tax of N160 billion, reflecting a 51.13 per cent increase year on year.
The bank also reported earnings per share of N4.58, a 52.16 per cent growth from the N3.01 reported a year earlier in 2020 and has grown its profits by 167 per cent in four years since hitting N60 billion in 2017 with the profit now touching roughly N160 billion.
As the largest Nigerian lender by customer base restructures into a Holding Company (if the proposal gets ratified by shareholders), it has significantly expanded its assets base after recent acquisition of some pension fund firms and offshore financial institutions in Angola and elsewhere.
The bank recently acquired 80 per cent stake of First Guaranty Pension Fund Limited, and thereafter moved ahead to acquire 65 per cent stake in Sigma Pension Fund Limited.
“That gives them a combination of over N1 trillion assets under management. And this places them among the top four pension fund firm in the industry after Stanbic IBTC Pension Fund, ARM, and Premium Pension Limited,” says the Managing Director, APT Securities and Funds Limited, Garba Kurfi.
The Chief Analyst of APT is of the view that Access Bank share price is highly undervalued considering the bank’s good fundamentals and recent acquisitions that have further boosted its assets base, describing the lender as a great bank of the future.
His words, “Access Bank also went to Angola and other countries and acquired more banks offshore. So, this is the bank of the future because it keeps expanding. The sky is its limit.
“Looking at the future with strong earnings of Access Bank, I shan’t be surprised if by next year the share price trades above N15 per unit, and rising to the top four banking stocks after GTCO, Zenith and any other. The stock is grossly undervalued presently. But that is due to poor liquidity condition of the market,” said the financial analyst and senior dealing of the Nigerian Exchange.
The general consensus among market operators and financial analysts is that banking equities traded on Nigerian Exchange are highly undervalued due to liquidity crunch on the exchange.
As shareholders move to ratify the restructured Access Bank into a Holding Company, investors are scrambling to grab the shares trading on the floor of Nigerian Exchange. To underscore management’s confidence in the equity’s performance trajectory, the Group CEO, Herbert Wigwe, is among the investors snapping up all available shares of the bank traded last few weeks.
All the Group CEO’s shares purchase transactions under the legal entity identifier marked 0292005048H3P6V81753 and reported as Indirect Holding through Tengen (Mauritius Limited) occurred about two weeks to the statutory meeting scheduled for November 29, 2022 where shareholders are expected to consider and adopt the Statutory Report, and also to disclose the Corporation’s Register of Members, which would be produced at the commencement of the Statutory Meeting and remain open for inspection throughout the meeting.
In the meeting notice to shareholders dated November 4, 2022 and signed by the company secretary, Sunday Ekwochi, shareholders are encouraged to send to a designated email address questions relating to the formation of the corporation not later than November 21, 2022 in line with Section 235 (8) of CAMA 2020.
Also shareholders present at the statutory meeting may discuss any matter relating to the formation of the Corporation and its commencement of business or arising out of the statutory report.
The notice further stated thus: “In accordance with Section 235 (9) of CAMA, 2020, any shareholder who wishes for a resolution to be passed on any matter arising out of the Statutory Report shall give further 21 days’ notice from the date on which the Statutory Report was received to the Corporation of his intention to propose such a resolution.
“In this case, the Statutory Meeting shall not be held until the expiration of the 21 days’ notice given to the Corporation by the shareholder. Adjournment of Meeting In accordance with Section 235 (10) of CAMA, 2020, the Statutory Meeting may be adjourned and at any adjourned meeting any resolution of which notice has been given in accordance with the Articles of Association, either before or subsequently to the former meeting, may be passed, and the adjourned meeting shall have the same powers as the original meeting,” the Company Secretary, Sunday Ekwochi, wrote in the meeting notice.
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