Devaluation drove Access Bank loan growth

Access Bank has said its lending grew by 32 per cent in 2016, far above its target for that year, due largely to the devaluation of the naira that drove up the local currency value of foreign loans stating that its core credit rose only 8 per cent.
The bank’s exposure to Etisalat Nigeria is N40 billion about $131 million, Herbert Wigwe the the bank’s CEO said. A senior executive of Etisalat Nigeria said it was in talks with local banks to renegotiate the terms of a $1.2 billion loan it took out four years ago after missing a payment in February. Mr. Wigwe also said that Etisalat had converted a shareholder loan to the Nigerian arm to equity to free up cashflows and that it may need to bring in fresh equity.

Access had set a 10 per cent target last year for loan growth and said it would keep the same target for this year, while monitoring the level of bad loans. Loans however grew 25 per cent in 2015, it said in a presentation. The naira lost around a third of its value against the dollar last year after the central bank stopped trying to peg it. The currency has since weakened further on the black market despite interventions to maintain a stronger official rate.

Wigwe said that it saw no need to raise new dollar financing but that it had completed an initial public offering for its subsidiary in Ghana, selling a 6 per cent stake for $6 million.