Banking

Big new competitor in South Africa’s banking sector

Access Bank has grown rapidly across Africa over the past 36 years, with the Nigerian bank now turning its attention to the continent’s banking powerhouse, South Africa. 

While the bank has been steadily growing its capabilities in the country, its purchase of Bidvest Bank is set to accelerate its expansion in the local market.

Access Bank is a relatively young bank. It was founded in Lagos in 1988 and began operating in 1989. 

Less than a decade later, the company was listed on the Nigerian Stock Exchange with the ambitious goal of becoming a top ten bank on the continent by 2007. 

Boosted by its access to capital, Access Bank began expanding aggressively by acquiring competing banks and absorbing their infrastructure and clients. 

Initially, the bank’s expansion plans were limited to Nigeria as it realised it needed significant capital to expand outside the country and compete with global banks. 

As Access Bank steadily grew in Nigeria, South Africa’s Big Four – Absa, Standard Bank, FirstRand, and Nedbank – expanded in Africa. 

Snapping up competitors and sometimes starting their own operations from scratch, these banks came to dominate finance in Sub-Saharan Africa. 

To compete, Access Bank would need more capital than the Nigerian financial markets could provide. After merging with the Intercontinental Commercial Bank in 2009, the bank was listed on the London Stock Exchange. 

During the next decade, Access Bank would continue buying smaller Nigerian banks to dominate its home market before looking abroad. 

Its purchase of Diamond Bank in Nigeria made Access Bank the largest bank in Africa by customer base, serving over 60 million clients across 24 countries. 

Simultaneously, the bank announced its aim to be among Africa’s top five banks by 2030. The only way this could be achieved was to tap into the continent’s most developed economy and financial hub – South Africa. 

Access Bank formally entered the South African market in 2020 with its purchase of Grobank for $60 million. 

While this is fairly recent, the history of Grobank goes back even further than that of Access Bank, to 1947, when it was The South African Bank of Athens. 

This bank was formed to specifically serve the Greek expat community in South Africa and finance small businesses founded by immigrants. 

In 2018, the Bank of Athens concluded a deal with AFGRI, Fairfax Capital and the PIC to acquire the majority of the Bank’s shares. 

In line with the shareholders’ vision, the Bank realigned its strategy to focus on South Africa’s food and agribusiness markets, from farming to food retail. 

The bank rebranded and relaunched as Grobank, building on its business banking expertise and developing secondary agri-market skills and capabilities.

In 2020, Grobank was sold to the Access Bank Group. Access Bank invested and acquired a controlling stake in Grobank and, in 2021, rebranded the business as Access Bank South Africa. 

Crucially, this gave Access Bank a banking licence to operate in South Africa and enabled it to set up operations in the country. 

However, Grobank was a relatively small bank and had a niche focus on the agricultural sector – a far cry from Access Bank’s focus on retail clients. 

When Bidvest Bank was put up for sale by its parent company, Access Bank was presented with a significant opportunity to repeat its expansion-by-acquisition strategy employed in other parts of Africa. 

In December 2024, Bidvest announced that it sold its bank to Access Bank for around R2.8 billion and expects the deal to be concluded in the first half of 2025. 

While this provides a great opportunity for Access Bank to tap into the South African market, Bidvest Bank is yet again another niche bank without extensive retail operations. 

The bank largely focussed on fleet management, with extensive vehicle and asset financing operations. 

It also benefitted immensely from its ability to cross-sell its products within the Bidvest group and not battle against South Africa’s biggest banks for clients and deposits. This is something Access Bank will have to do.

South Africa’s Big Five banks, which includes Capitec, control over 90% of deposits in the country and issue the same share of all home loans. Their hold on the banking sector has proven to be a tough nut to crack. 

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