Group Managing Director/CEO, Access Bank Plc
(For building the largest banking institution in Nigeria in 2019 and being the highest profit improving bank CEO in the year, Wigwe is named one of the top 10 bank CEOs, 2019 by The Top10 Magazine.)
Mr. Herbert Wigwe, group managing director/CEO, Access Bank Plc, is the dealmaker in a merger that gave birth to the largest banking institution in Nigeria in 2019 by the size of the balance sheet. He unveiled the post-merger status of Access Bank and Diamond Bank in 2019, showing new strengths in critical areas.
The new bank emerged further recharged from an enhanced operating momentum with which Access Bank closed the 2018 trading. Access Bank has emerged a carrier of the largest earning assets in the Nigerian banking space as well as the biggest revenue earner in the banking business.
The merger was a strategic combination of the established strength of Diamond Bank in retail business to Access Bank’s leadership in the credit market. With that, the new bank has ascended to the position of the largest single depository with customer deposits in excess of N4 trillion and customer lending portfolio approaching N3 trillion.
Wigwe has definitely begun to reap the rewards of the giant step for Access Bank. He has diluted the bank’s high cost of funds, improved margins and enlarged profit capacity.
The Access Bank’s boss took the bull by the horns and has succeeded in rewriting the history of Nigerian banking by forming the largest banking institution in the country almost overnight. He closed the third quarter operations in 2019 with a N6.6 trillion naira bank – the largest in Nigeria by the size of the balance sheet. He registered a top record high jump of 33 percent in asset base from the closing figure of under N5 trillion in 2018.
The overnight swelling of the size of the balance sheet has extended further the bank’s pre-merger lead as the biggest lender. Access Bank was already carrying the largest credit portfolio in the banking industry at about N2 trillion before the merger. It has extended the leadership by loan portfolio with a net lending to customers position of close to N2.8 trillion at the end of the third quarter of 2019.
Expansion of earning assets has lifted the bank’s earning capacity. Revenue maintained an accelerated mood all the way from 15 percent in the first quarter to 33 percent at half year and further to almost 48 percent at the end of the third quarter.
Interest earnings, powered by rapid portfolio expansion, provided the spur for revenue growth. At N405 billion at the end of September 2019, interest income rose a clear 48 percent year-on-year, defying the general industry lull.
This enabled an exceptional growth of 70 percent in net interest income to N210 billion at the end of the period. This is a key operating strength for Access Bank in a year of generally decelerating, even declining net interest income in the banking industry.
Wigwe holds a comfortable lead in the volume and growth margin of revenue in the banking industry in a season of lingering earnings constraints in banks. Access Bank closed third quarter operations in 2019 with gross earnings of N513.7 billion – a year-on-year growth of over 37 percent. He looks quite confident to post the biggest revenue figure in the banking industry as the corporate reporting season approaches.
Access Bank’s CEO encountered certain operating challenges in the course of the 2019 financial year. He faced a major impediment in the area of a resurgence of bad loans after a sharp drop in the prior financial year. Against a drop of over 57 percent in 2018, loan impairment expenses rose by 27 percent to N10.6 billion at the end of the third quarter.
He also had to contend with rising operating expenses – which grew ahead of revenue and claimed an increased share of gross income at 38 percent. The bank’s management took steps to counter the cost increases by exploiting the advantage gained in reduced average cost of funds. It reduced the share of interest income claimed by interest expenses from 55 percent in the same period in 2018 to 48 percent at the end of the third quarter.
That has not fully dealt with the challenge of rising cost and the effect on margins that couldn’t let the bank convert much of the enlarged revenue into profit. Wigwe could not prevent profit from slowing down in the course of the year, as he could not keep costs at the moderated level that enhanced profit capacity at the beginning of the year.
The initially enhanced profit margin therefore kept on slipping out of Wigwe’s hands. He lost profit margin from the height of 26 percent in the first quarter to 17.7 percent at the end of the third quarter. Profit margin was equally down by the end of September 2019 from 18 percent the bank recorded at the end of 2018.
That notwithstanding, the Access Bank’s boss is on the way to delivering the hoped post-merger dividends. He is very likely to emerge the highest profit improving CEO among the leading banks in 2019. Access Bank can be expected to advance to the league of banks with triple digit net profit numbers at the 2019 close.
The bank ended the third quarter operations with after tax profit of N90.74 billion, which is a year-on-year growth of 44 percent. Profit outlook indicates that Wigwe would be reporting one of the three biggest profit figures from the banking sector for the 2019 operations. That would be a strong profit advance for the second year after growing net profit by 58 percent in 2018.
For building the largest banking institution in Nigeria in 2019 and being the highest profit improving bank CEO in the year, Wigwe is named one of the top 10 bank CEOs, 2019 by The Top10 Magazine.
Wigwe took over the leadership of Access Bank in January 2014. Handing over the baton of leadership, his former boss, Mr. Aigboje Aig-Imoukhuede, described him as a perfect fit to lead the bank in its next chapter of transformation. Wigwe is rated as having complete understanding of corporate strategy, technology and the competitive environment.
He has been in Access Bank since 2002, when he and Aig-Imoukhuede led a group of investors that acquired the bank. He was part of the spirited effort made to recapitalize the bank. He was part of the charting of its new vision and the drawing of the roadmap.
He shared the big dream of placing Access Bank among the top five largest banks in Nigeria. He has been on ground to translate the big dream into reality. He received the baton for the last lap of the race to deliver the mandate and has run beyond the top five target to stand the bank at number one.
He had spent over 10 years at Guaranty Trust Bank and left as an executive director to co-lead the transformation of Access Bank in March 2002. He is an Alumnus of Harvard Business School Executive Management Programme. He holds a Master’s degree in banking and international finance from the University College of North Wales; a Master’s degree in financial economics from the University of London and a B.Sc. degree in accounting from the University of Nigeria, Nsukka.