Access Holdings Plc has explained and justified its high cost-to-income ratio, attributing it to essential investment in various areas as its growth and expansion, which are expected to bring substantial returns in the short to medium term.
Access Holdings Plc stated that substantial financial investments in expanding Access Bank Plc’s physical and technological infrastructure are part of a broader strategy aimed at strengthening its presence in key global markets, enhancing profitability, and ensuring long-term viability.
During a recent media roundtable, executives from Access Holdings Plc provided this insight into the company’s strategies, including Acting Group CEO Bolaji Agbede; Roosevelt Ogbonna, Group Managing Director/CEO of Access Bank Plc, Dave Uduanu, Managing Director of Access Pensions; Kemi Okusanya, Managing Director of Hydrogen Payments; Khade Idogho, and other Executive Directors. They discussed key initiatives that reinforce the group’s vision for achieving sustainable growth and making a global impact.
The Managing Director, Roosevelt Ogbonna, consenting to the banking group’s high cost-to-income ratio, explained that the expenses were essential, one-time investments to expand operations and take its pride of place in financial services across Africa and globally. He noted that while costs may stay elevated for a period, they are expected to eventually decrease.
“They say, ‘your cost income ratio is high’. Yes, I agree it is high, but I’m making the investment this year. We’re going to spend $80 million on technology,” he said.
He added, “That’s the cost that I’m hoping I don’t have to repeat next year or the year after. But guess what? It means that I can process 200 million transactions per second. So, I’m not building for today. Today I don’t even have 20 million customers. I have 65 million customers, and the projection is by 2027, I have 125 million customers, but I’m projecting 200 million transactions per second. And how do we count transactions today?
“We say that by 2027, 50 million customers will transact with us daily, and they don’t necessarily have to do banking transactions. They could do consumer lending, do fintech, do fashion business, do banking business, if they have so that’s how we look at the entire ecosystem. At least 50 million customers come to us daily. We will continue this investment phase. The cost to income ratio will stay elevated for this period, and ultimately, and ultimately, it will begin to wind down,” he stated.
He further highlighted that Access Bank is focusing on investing in physical and digital infrastructure to improve the banking experience across Africa.
“In 2023, we opened 61 branches in Nigeria, even amid a challenging macroeconomic environment, demonstrating our commitment to expanding retail banking,” he said.
He also mentioned that the bank is currently developing fully digitalized branches, referred to as “Branches of the future”, in key operational areas. He pointed out that this expansion will utilise “fit for purpose” technology to enhance financial access for underserved communities.
However, Roosevelt Ogbonna stresses that Access Bank plans to expand its operations in the U.S market by Q1 of 2026, enhancing its presence beyond established locations in London, Hong Kong, and Paris.
He emphasised that “Our goal is to engage in global markets, holding conversations with diverse counterparties worldwide.” He added, detailing Access Bank’s ambition to operate in 19 African markets by 2027, while aiming to be among the top three banks in at least eight of those.
For better understanding, Ogbonna reiterated “We said we are transiting from what used to be an investing strategy into a consolidation phase of our strike. Now, what does that mean? So, we have five years, if you go back to 2002 and look at the documents we shared with the market. We said the next five years, starting 2023, were going to be in three distinct phases.
The first phase was the investment phase, and we said that phase was going to last 2023 to 2025. In 2026 we said, we’re going to consolidate. And by 2027, it will be optimised. That’s how the document that is in public knowledge is stated in the investment phase. It means that my cost to income ratio will be high. There’s nothing I can do about it.
He further added, “when people are shouting, ‘your cost to income ratio is high’, I look at this that we’re playing a different strategy. I’m investing now! Now, what’s the kind of thing that you see that will come through? In the course of this year, I acquired a bank in Zambia. I’m going to have to spend $16 million for staff redundancy. It’s a one-off cost, but I’ll bear it, because guess what? That business last year made $15 million in profit. Guess what? They’re going to do $74 million. I’ve moved from $15million to $74 million but I paid a price of $16 million. I moved from $15million net to maybe $60 million; so, I’ve grown four times, but I’ve made that investment.”
