The Nigerian Access Bank has big plans for South Africa when it creates a new retail bank

  • The Access Bank Group founded the Access Bank South Africa.
  • The bank, headquartered in Nigeria, took over Grobank in March and will add its retail banking business.
  • She plans to open four branches and operate a digital bank by the end of the year.

South Africa is getting a new retail bank – Access Bank South. The Nigerian multinational commercial bank acquired the agricultural bank Grobank in March and officially launched its entry into the South African market on Monday.

While Grobank, previously Bank of Athens, had no retail business as it only focused on lending to farmers, Access Bank’s executive director Bennie van Rooy said the bank plans to compete in the retail space.

“We’re going to set up a retail bank in South Africa, with a combination of physical branches, opening at least three or four branches by the end of the year,” said Van Rooy.

He said the rollout, digital onboarding, and digital transaction capabilities will be done by the end of the year. It is aimed primarily at low wage earners and immigrants.

The bank has promised a “simple” retail banking offering and, like the new Aspire products from FNB, would like to follow up on consumers’ wishes to own a home, buy assets or take out loans for other reasons. Van Rooy said Access Bank will also open many doors for African companies to facilitate trade across the continent, a proposal that is likely to meet with a response in the face of the new African Continental Free Trade Area (AfCFTA).

“It will bring something to this African banking sector that didn’t exist before,” said Van Rooy.

Why South Africa?

Access is Nigeria’s largest bank and is represented in 14 African countries. In addition to the African coasts, it also has offices in China, Dubai and London.

But Access Bank’s ambition is to be “the world’s most respected African bank”. So it had to be present in South Africa, despite the increasing competition among local actors and the reluctance of its citizens to change banks.

“The story could not have been complete without our presence in key markets such as South Africa, Nigeria, Ghana, Mozambique and Botswana,” said Roosevelt Ogbonna, deputy general manager of Access Bank Group.

Ogbonna said South Africa will be “a critical anchor” for Access Bank’s South African strategy and it will be supported by the AfCFTA. He said more Nigerian companies are eager to do business in South Africa because of the AfCFTA.

Navigate South Africa’s banking competition

But despite the entry of more banks in South Africa, newer and other foreign players are not taking market share from the big four as expected. Capitec is the only bank that has managed to oust the Big Four in terms of customer numbers.

For the Access Bank, the path to gaining market share in the retail sector can look even steeper because the Grobank operates in a niche market.

But Ogbonna said Access Bank has never shied away from a challenge and knows it has what it takes to “win” in this market too. Herbert Wigwe, managing director of Access Bank Group, said the bank is “here to stay” and will change the way things are done in South Africa.

“These are the same conversations we had when we went to the UK. That was 12 years ago. We’ve been told all kinds of things; that at best it will take you 24 months to get your driver’s license – we’ll have it in six months” said Ogbonna about the skepticism they faced earlier.

Van Rooy said there are still many undeveloped “spots” in South Africa, especially immigrants, as many do not have South African bank accounts. Access Bank aims to be “the natural home” for everyone who lives in the country. He said if the bank focuses on the immigrant diaspora first, it will look for three million registered diaspora Africans.

“The Access Bank brand is recognizable across the continent … There is a tremendous opportunity for us to dominate and be the bank of choice in this particular segment,” he said.

Van Rooy said he doesn’t see it as a fight for Access Bank to gain market share as it is a “big bank with a little banking mentality” that will go out to rural poor and say, “I want to help you.” “.

“There’s no reason we can’t gain market share. We can’t get customers for our points presence, and we can’t quickly increase the number of accounts we open,” he added.

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