We needed N1bn to buy Access Bank but had only N200m – Aig-Imoukhuede

A former Group Managing Director of Access Bank Plc, Mr Aigboje Aig-Imoukhuede, has said he and his partner, Mr Herbert Wigwe, only had 20 percent of the money they needed to buy the bank in 2001.

Aig-Imoukhuede disclosed this in his new book, ‘Leaving the Tarmac: Buying a Bank in Africa,’ which was launched this week.

“Once the decision to buy a bank was made, the next question was which one should we buy? I sat down with Herbert in my rented house at 10A Festival Road, on Victoria Island, Lagos, and launched our venture by compiling a list of all the banks that were potentially available,” he said.

He said they spoke to different people within the industry and then began to interact with key stakeholders and shareholders of their target list of institutions.

He said, “We put together a team of advisers consisting of lawyers and investment bankers who were to support us in the process…

“As we engaged the key stakeholders of our target institutions, we quickly found out that our preferred candidates, which were banks that were doing fairly well by industry standards, were too expensive for us to be able to afford.”

Aig-Imoukhuede said those that were affordable were either in very bad financial condition and/or operated with values and philosophies which were inconsistent with those he and Wigwe believed in.

“Used to working, as we were, for one of the country’s most successful banks, we wanted our own bank to be of the same quality as GTB in as many ways as possible, particularly when it came to brand, culture and values,” he said.

He said one thing they were not prepared to compromise was their desire to build an institution that was founded on ethical values and professionalism.

He said, “There were periods when Herbert and I despaired of ever finding a deal that would match all our criteria, but we kept on going, refusing to give up, which is quite possibly the most fundamental rule of true entrepreneurship.

“Our faith in our abilities to succeed was sorely tested. The idea that was first germinated in 2000 finally came to fruition late in 2001, when we set our sights on Access Bank.”

According to Aig-Imoukhuede, Access Bank had been enmeshed in ongoing central bank investigations regarding widespread malpractices in foreign exchange, which involved a number of Nigerian banks.

He said in an attempt to turn its fortunes around, Access had in 1999 recruited executives from GTB, engaged management consultants and taken all the typical steps of a company seeking to transform itself.

He said successive management teams at Access were unable to marshal the necessary ingredients to put the bank on a sure footing and it continued to lurch from crisis to crisis.

“Somewhat ill-timed in 2001, the bank attempted to raise over N1billion through a public offer for subscription. Although the offer was underwritten by their issuing houses, the public failed to respond positively to the offer and, as the closure date came closer and closer, the advisers became increasingly worried about finding a buyer,” he said.

Aig-Imoukhuede said they found Access attractive because its board of directors included men of integrity who were well-respected in business circles; the bank was quoted on the Nigerian Stock Exchange, and its financial safety indicators did not point to an institution that was on the verge of failure.

He said, “While our decision to take up the unsubscribed shares was in effect a leap of faith (endorsed, I would like to point out, by the pastor of my church), it was our belief that since we would be controlling the management of the bank we were recapitalising, the risk of losing our investment was almost entirely in our own hands.

“The first challenge which we needed to overcome was raising the necessary capital to purchase the shares. We needed N1 billion, (US$9 million), and Herbert and I had just N200 million between us, comprising our shares in Guaranty Trust and the sum total of our savings.

“Therefore we needed to raise the balance of N800 million. We put together a list of investors comprising of friends and family who we believed would be willing to support us. We convinced them to place at our disposal landed properties and bank deposits on the strength of which we would be able to finance the acquisition.”

Aig-Imoukhuede said once they had raised the money, they then had to make sure that the recapitalisation complied with all relevant laws of the country.

“We ensured that every step we took in consummating the acquisition was consistent with legal requirements and would meet the expectations of the SEC, the CBN and the Nigerian Stock Exchange,” he added.

He said they became the owners of the bank in March 2002, adding “At that time, I was still only 36 years old, but I already had had 10 years of senior management banking experience at GTB, where I had risen from being middle manager to working next to the managing director at the top of one of the best-run banks in the country and had been privileged to learn the secrets of building a highly successful business.”