[Nigeria] Access Bank’s sale of SIPML may boost Q1 profits by N1.14 bn

Access Bank may receive up to N1.14 billion in onetime gains in the first quarter of 2017, from the sale of its investment in Stanbic IBTC Pension Managers (SIPML).

The tier-one lender said on Friday it has reached an agreement to sell its 17.65 percent equity shareholding in Stanbic IBTC Pension Managers (SIPML) to the Company’s majority shareholder – Stanbic IBTC Holdings Plc after receiving all regulatory approvals.

This follows the Central Bank of Nigeria’s (CBN) directive to Access Bank Plc to divest from (SIPML) in compliance with the CBN’s Regulation on the scope of Banking activities and ancillary matters, No.3 2010.

The investment in SIPML is valued at N1.14 billion as at December 2015, based on average price to book multiples of comparable companies, according to data from Access Bank’s financial statement for the period.

Adjusted factors used for the valuation are the illiquidity discount which assumes a reduced earning on a private entity in comparison to a publicly quoted entity.

Market Intelligence calculates that if the deal is done in the first quarter of 2017, shareholders will see one-time gains equivalent to 7.7 percent of previous period (Q1, 2016) profits as the gain arising from disposal of subsidiaries is included in the profit of discontinued operations in the statement of comprehensive income.

Access Bank with a market capitalisation of N200 billion ($634 million) has returned 18.23 percent this year, compared to a – 5.71 percent return on the broad NSE market index.

www.accessbankplc.com