Nigeria's Access Bank targets West African trade services
Nigeria's Access Bank plans to grow its trade payment and settlement service over the next five years as foreign lenders faced with increased regulation at home cut their correspondent banking exposure to West Africa.
So-called correspondent banking operations boomed over the last decade as commodity prices spiked and offshore lenders looking to tap into trade flows to Africa extended lines of credit to governments and businesses.
But most are now scaling back as shaky African economies face low commodity prices creating payment hiccups, a gap which Access Bank is aiming to fill, and the Nigerian Bank’s Chief Executive, Herbert Wigwe, told Reuters.
Wigwe said Nigeria's fourth biggest bank already has operations in Britain and Dubai and was looking to establish relationships in Hong Kong and the United States where some of the trade flows originate. But it would also need to upgrade its technology and compliance procedures, he said.
Wigwe did not give a figure on how this would impact profit but said intra-African payments hit $160 billion a year and that Access was looking to increase its share significantly.
In October, Access posted group pretax profit of ₦72.91 billion, up 5.7 % from a year earlier. "Some countries in West Africa are becoming disinterred. The large Western banks, as a result of the huge cost of compliance, they basically need to leave," he told Reuters in an interview.