Business Combination With Intercontinental Bank Plc[1][1]

September 2011

Business Combination with Intercontinental Bank PlcPresentation to Investors and Analysts

The information presented herein is based on sources which Access Bank Plc (the “Bank”) regards dependable. This presentation may contain forward looking statements. These statements concern or may affect future matters, such as the Bank’s economic results, business plans and strategies, and are based upon the current expectations of the directors. They are subject to a number of risks and uncertainties that might cause actual results and events to differ materially from the expectations expressed in or implied by such forward looking statements. Factors that could cause or contribute to differences in current expectations include, but are not limited to, regulatory developments, competitive conditions, technological developments and general economic conditions. The Bank assumes no responsibility to update any of the forward looking statements contained in this presentation.

Disclaimer

The information should not be interpreted as advice to customers on the purchase or sale of specific financial instruments. Access Bank Plc bears no responsibility in any instance for loss which may result from reliance on the Information. Access Bank Plc hold copyright to the Information, unless expressly indicated otherwise or this is self-evident from its nature. Written permission from Access Bank Plc is required to republish the information on Access Bank or to distribute or copy such information. This shall apply regardless of the purpose for which it is to be republished, copied or distributed. Access Bank Plc’s customers may, however, retain the Information for their private use. Transactions with financial instruments by their very nature involve high risk. Historical price changes are not necessarily an indication of future price trends. Investors are encouraged to acquire general information from Access Bank Plc or other expert advisors concerning securities trading, investment issues, taxation etc in connection with securities transactions. The Information contained in this presentation is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by the Bank. Any person at any time acquiring the securities must do so only on the basis of such person’s own judgment as to the merits of the suitability of the securities for its purposes and only on such information as is contained in public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained herein. The information is not tailored for any particular investor and does not constitute individual investment advice.

2 Business Combination with Intercontinental Bank

Parent Company : Access Bank Plc is a full service Commercial Bank registered in Nigeria on February 8, 1989 with RC number 125384

Subsidiaries : 9 Banking Subsidiaries (United Kingdom and 8 other African Countries)

No of Employees : 1751 Professional staff

Accounting : Local GAAP and IFRS

Credit Rating : A- / BBB / A- (RWN) / BBB- (RWP) (GCR/Agusto/S&P(nga)/Fitch(nga))

Partnerships :

Risk Management : Basel II Capital Accord

Focus Segments : Institutional (Private and Public Sector), Retail and Middle market (Value chain)

Channels : 150 Business Offices 264 ATMs, 310 POS

Share Capital : Authorised share capital of N10 billion (18 billion ordinary shares and 2 billion preference shares of 50 kobo each respectively)

Paid up share capital of N8.94 billion ( 17.9 billion ordinary shares of 50 kobo each)

OTC Unlisted GDR

United Kingdom

United Kingdom

Access Bank Overview


A Compelling Transaction

Strategic Rationale

Transaction Structure and Key Terms

Plans for Integration

Financial Impact

Stakeholder Benefits

Agenda


In 2002, we embarked on a transformation journey with a strong conviction that pro-active responses to forces driving banking consolidation could enable us migrate from a fourth-division Bank to a top 3 Bank by 2012

Consolidating Position in a Market with Attractive Outlook


Large Banks

Foreign Banks

Mid-Tier Banks

Merchant Banks

Family-controlled Banks

Large Banks

Mid-Tier Banks

Niche BanksState-owned

Banks

Middle Squeeze

Mid-tier, family-controlled and state-owned banks collectively lose share to

large banks, foreign banks and specialized firms with unique value

propositions

2002 2012

Middle Squeeze

The Opportunity to Transform from Mid-Tier to Scale is Compelling

• Attainment of corporate vision

and aspirations

• Leading player in clearing and

settlement platforms

• Improved return on

investments (ROE)

• Significantly lower cost of

funds and improved risk rating

• Reap benefits of ‘flight to

safety’

• Significantly redefine

corporate direction and

aspirations

• Potentially be shut out of

settlement and clearing bank

roles

• ROE and risk rating

sustainability issues

• Fundamentally redefine

corporate direction and

aspirations

• Rationalize a significant

portion of the bank’s financial

and other resources

• Focus exclusively on

corporate and investment

banking

Key

Im

pli

cati

on

s &

Co

nsi

der

atio

ns



Strategic Rationale



Financial Impact


Agenda


Strategic Rationale for the Merger

The combination creates one of Nigeria’s top 3 banking Groups by several indices1

Merger creates an industry leader with multiple product strengths, leadership in focus areas of the financial services sector, high growth potential and unrivalled brand appeal

2

Meaningful opportunities to unleash Access Bank’s competencies and resources in Treasury, Trade Finance, Cash Management and Corporate Finance on an expanded Customer base

3

Significant growth in retail banking segment with the combined entity having a customer base of over 5 million customers

4

Lower cost of acquisition due to CBN intervention - significant de-risking of Intercontinental’s balance sheet and significant opportunities to build up regulatory capital internally

5

Increased balance sheet size will provide combined entity with an enhanced capacity to provide credit to a larger combined wholesale and retail client base.

6

Merger delivers operational synergies in employee and branch productivity, leading to resource optimization

7


Rationale Evident in Much Enhanced Market Position

Source: Company ReportsNote: Financial data as of June 2011.


Combined Entity (June 2011)

Metric Market Share Market Share Ranking

Total Loans 6.7% #5

Total Deposits 8.7% #4

Branches 9.4% #3

Customer Count 20% #33.0% 17.0%

2.5% 6.9%

3.3% 5.3%

5.4% 1.3%

Access Intercontinental


Strategic Rationale



Financial Impact


Agenda


Transaction Overview

Transaction Description

Reorganization of share capital via a scheme of arrangement under Section 539 of CAMA and Section 118 of ISA

Placement of 75% of reconstituted capital with Access Bank through PSI Limited and placement of 15% of capital with Asset Management Corporation of Nigeria (AMCON)

Intercontinental Bank to be absorbed into Access by way of a scheme of merger within 12 months

Key Terms

Access Bank via PSI Limited to inject N50bn into Intercontinental Bank as investment amount

AMCON to recapitalize Intercontinental Bank to a zero NAV

Existing shareholders to retain 10% shareholding (post-money)

Existing shareholders shall retail 1 share for every 7 shares previously held

Intercontinental Bank will be delisted from the Nigeria Stock Exchange (NSE)

Intercontinental Bank will operate as a high-performing subsidiary of Access Bank up to the date of merger

Intercontinental Bank shareholders who wish to exit are able to sell their shares to Access Bank at N2.75 per share

Where an employee does not wish to continue in employment of Access Bank, they are entitled to fully funded gratuity benefits

Key Transaction and Integration risks have been addressed in the Transaction Implementation Agreement (TIA) e.g. Liquidity risk, loss run rate, Deferred Tax Assets (DTA), cancellation of preference shares, Change of Control etc


Key Transaction Timelines

Submission of Expression of Interest (EOI) Due Diligence commences (Phases 1 -3) Access Bank selected as preferred bidder for Intercontinental Bank Signing of a Memorandum of Understanding Signing of a Transaction Implementation Agreement (TIA) CBN approval of TIA SEC / FHC clearance of Scheme document Court-ordered meeting of Intercontinental Bank

Annual General Meeting of Intercontinental Bank

Extra-ordinary General Meeting of Access Bank

Obtain Court Sanction of Scheme

Apply to NSE for delisting of shares

Settlement of Financial Accommodation by AMCON

Access transfers Investment Amount into Intercontinental’s account with CBN

Allotment of Investor Shares

Access reconstitutes Board and Management of Intercontinental

16 December 2009

25 August 2011

15 February 2010

12 October 2010

28 March 2011

6 July 2011

7 July 2011

Status

26 September 2011

29 September 2011

26 September 2011

26 September 2011

29 September 2011

29 September 2011

29 September 2011

29 September 2011

3 October 2011



Strategic Rationale



Financial Impact


Agenda


Governance and Management of Intercontinental Bank

Access Bank’s rigorous Group Governance

framework will guide and facilitate the

governance and management of

Intercontinental Bank

Intercontinental Board and Management will

be accountable to Access Bank Plc on a day

to day basis

Upon recapitalization, Intercontinental Board

will be reconstituted to include Access Bank

executives as Non-Executive Directors and

Executive Directors. Representation will also

include 2 independent directors

A detailed 2-year business plan (2011-2012)

for Intercontinental Bank has been approved

by Access Bank Board of Directors.


We have Designed a Robust Integration Planning Process

Phase I: 3–4 Months Phase II: 12 Months

Acquisition viaPlacing of Shares and injection

of investment amount

Single Entity Day 1

Project Definitionand Planning Subsidiary Phase

Merger Phase

3 Months

Integration Execution

Scheme of Merger

Program Management

9 Months

The post-acquisition integration program of both banks will be executed in two broad phases. Access and Intercontinental, assisted by Accenture have been involved in integration planning process for the last 6 months:

Completed

KEY

Integration effort formalized early on signing of MOU

Boards and management of both banks fully involved

Strong Project Management Office advised by Accenture

Integration teams structured around key value delivery areas that have been identified as biggest synergy opportunities

38-man Integration team


Access Bank Board

Access Bank Executive Committee

Program Management Office

Integration Team Leads/Program Management Office Staff

Customer

Management

Employee

Management

Head Office

Consolidation

Branch

Rationalisation

Treasury Consolidation

IT IntegrationFin Mgt.&

RegulatoryReporting

Ops. Process Alignment &

Consolidation

Communications

Culture & Change

Credit Risk Consolidation

Integration Objectives and Guiding Principles


Guiding Principles Objective

Achievement of a lean organization to ensure the

efficient and effective utilization of resources

Right Sizing of Branch & other resources

Adoption of Centralized Procurement / Sourcing

Centralization of Core functions and Adoption of Shared

Services to ensure consistency in service delivery

standards and customer experience across various

touch points in a cost - efficient manner

Optimize Customer and Products Experience to ensure

customer satisfaction and retention

Adoption of Single IT Application Infrastructure /

Architecture to ensure synergy, improved quality service

delivery and seamless integration

Entrench Effective Risk Management

Ensure Appropriate and Effective Branding &

Communications

1

2

3

4

5

6

7

8

Achieve significant cost reduction through branch rationalization, IT & Operations consolidation and de-duplication of enterprise functions and other efficiency initiatives

Enhance corporate performance through implementation of key initiatives identified in the Commercial Strategy

Minimize operating risks by identifying and managing key risks and developing appropriate mitigation actions

Retain the customer base: Less than 10% customer attrition, by defining a clear retention plan focusing on highly valued, “at risk” customer segments

Retain key talent: More than 90% retention of top talent to address skills gaps

Improve employee engagement and development through a robust and comprehensive assimilation and learning development program

Improve Service Quality and customer experience through adoption of a single technology and operations platform, process alignment, consolidation and centralization programs; and Access Bank’s Project 5* program

1

2

3

4

5

6

7


Strategic Rationale



Financial Impact


Agenda


Merger by absorption of Intercontinental Bank into Access Bank

PSI Limited will be issued 15.0 billion ordinary shares of 50 Kobo each corresponding to N7.5 billion in the share capital of Intercontinental Bank for the injection of the

investment amount

Following the reorganization of capital, Intercontinental Bank will place the subscription shares with AMCON and PSI

Limited

Authorized capital of the Bank shall be increased by 12.4 billion ordinary shares of 50 Kobo each, to the target share

capital of N10.0 billion comprising 20.0 billion ordinary shares of 50 Kobo each

Reduction of share premium account from N146,712,000,000 to zero (0) to offset the negative retained

earnings

Retention of N1,000,000,000 (comprising 2,000,000,000 ordinary shares of 50 Kobo each) in the Share Capital

account attributable to Existing Shareholders

Pro-rata reduction and cancellation of 11,850,000,000 ordinary shares of 50 Kobo each in the share

capital of Intercontinental Bank

Cancellation of 5,056,000,000 Shares purchased directly or indirectly with the funds of Intercontinental Bank

Fundamental Changes to Intercontinental’s Capital Structure

Current Authorized Ordinary Share Capital –

Current Issued and Fully Paid-up Ordinary Share Capital –

Unissued Shares –

N12.25 billion 24.5 billion ordinary shares of 50 Kobo each (A)

N9.453 billion 18.906 billion ordinary shares of 50Kobo each (B)

5.594 billion Ordinary Shares of 50 Kobo each (A–B)

1

3

2

4

5

2

3

1


Existing Holding

(Bn shares)

Post-Scheme Holding

(Bn shares) % New Holding

Existing Shareholders 18.906bn 2.0bn 10.0

AMCON -- 3.0bn 15.0

Project Star Investment Ltd -- 15.0bn 75.0

Total 18.906bn 20.0bn 100.0

6

7

8

31 December 31 December 31 December

2009 2010 2011E

Net Loans 158,100 119,211 68,804

Gross Loans 715,398 310,834 104,257

Non-Performing Loans 561,563 200,428 61,141

AMCON Bonds 0 108,264 343,284

Deferred Tax Asset 163,652 153,611 1,705

Total Assets 632,850 708,588 765,411

Customer Deposits 527,289 677,527 610,075

CBN Loan 100,000 100,000 0

Total Equity (380,116) (325,892) 34,210

Total Liabilities and Equity 632,850 708,588 765,411

Intercontinental Bank’s Balance Sheet is Dramatically Transformed

AMCON and Access Bank capital injection has dramatic impact on balance sheet

Impact of AMCON process and Access recap on Intercontinental Balance Sheet Comments

Acquisition of a ‘Good Bank’ facilitated by the Asset Management Company of Nigeria (AMCON)

Over NGN 480bn of NPLs transferred to AMCON during 2010 and 2011

Further injection of c.N550bn by AMCON to recapitalise Intercontinental Bank to a position of zero (0) NAV

Subsequent injection of c.N50bn by Access Bank into Intercontinental Bank to achieve an adequate level of regulatory CAR at Intercontinental Bank

Repayment of CBN loan with AMCON Bonds

Selected ratios in 2011E: CAR: 15.0% Loans/Deposits: 11% Liquidity Ratio: 83% NPL Ratio: 59%


Source: Company disclosures (1) Including Minority Interest.

(1)

Pro Forma Financial Position


Group Financial Highlights for Access Bank plus Intercontinental Bank (June 2011)

(N ‘m) Access Bank Intercontinental Bank Aggregate

Profit and Loss

Net Interest Income 27,172 (11,566) 15,606

Fees and Commissions 9,791 8,523 18,314

Other Operating Income 3,193 18,507 21,701

Total Operating Income 40,157 15,464 55,621

Total Operating Expenses (24,679) (33,020) (57,699)

Provisions/Write-backs (5,115) 19,236 14,121

Profit Before Taxes 10,396 1,680 12,076

Profit After Taxes 8,079 1,346 9,425

Balance Sheet

Total Assets 984,434 708,781 1,693,215

Gross Loans 549,171 180,577 729,748

Net Customer Loans 512,419 95,427 607,846

Customer Deposits 639,112 620,036 1,259,148

(NGNbn) 2011F 2012F 2013F

Profit & Loss

Net Interest Income (16.7) 55.5 72.2

Non Interest Income 12.2 15.5 19.9

Operating expenses (58.0) (52.4) (50.7)

(Provisions)/writebacks 22.1 (7.0) (14.4)

Profit/(Loss) Before Tax and Extraord. (40.5) 11.6 27.0

Extraordinary items (193.3) 0.0 0.0

Profit/(Loss) before Tax (233.8) 11.6 27.0

(0.1) (3.5) (8.1)Profit/(Loss) after Tax (233.9) 8.1 18.9

Balance Sheet

Net Loans 68.8 80.2 86.5

AMCON Bonds 343.3 380.6 418.0

Treasury bills and other eligible bills 121.1 260.7 420.3

Due from other banks 64.7 92.6 144.9

Total Assets 765.4 990.3 1,229.6

Customer Deposits 610.1 817.7 1,078.3

Interbank Deposit 73.5 80.1 0.0

Total Liabilities 731.2 948.0 1,158.3

Total Equity 34.2 42.3 71.4

21

Intercontinental Bank – Forecast Financials & Synergies

Forecast P&L and Balance Sheet Likely Impact of Synergies under Access Management


(NGNbn) 2011F 2012F 2013F

Synergies

Revenue 2.0 2.5 2.8

Cost 3.9 11.3 8.1

Financial 0.0 5.0 5.0

Total Synergies (pre-tax) 5.9 18.8 15.9

Total Synergies (post-tax) 5.0 16.0 13.5

Pre-Synergies

Profit/(Loss) after Tax (233.9) 8.1 18.9

Earnings per Share n.m. 0.40 0.95

RoE n.m. 21% 33%

Post-Synergies

Profit/(Loss) after Tax (228.9) 24.1 32.4

Earnings per Share n.m. 1.20 1.62

RoE n.m. 63% 57%

Source: Company disclosures (1) Including Minority Interest.

(1)

Access Bank plc

Funding

26%

(42%)

26%

0%

22%15%

19%

Access Intercontinental Group

Illustrative Pro Forma Capital Position Funding the Capital Injection

• The transaction will be funded with Access Bank internal financial resources

• Access Bank is one Nigeria’s best capitalized banks with a CAR of 26% as of HY2011

• Access Bank also have a very robust liquidity position, with a net free cash position of N111.6bn as at June 2011

Current Position

Source: Company disclosures

AMCON Recap of ICB

Access Bank injection into ICB

Business Combination with Intercontinental Bank22

Access Plus: Impact of Combination on Business Segments


Retail Banking

Rank #1 or #2 in retail banking in Nigeria by market share and profitability Significantly enhanced revenue-generation potential driven by a combination of increased customer base,

enhanced distribution capacity and access to a large pool of stable retail deposits Increased capabilities in retail product development and management Retail economies of scale driving lower operating expenses

Commercial Banking

Rank #1 or #2 in commercial banking in Nigeria by revenues, deposits & LAD Increased geographic presence enables increased penetration of existing customers and acquisition of

new customers thereby enhancing revenue potential Economies of scale and best practice sharing driving operating expenses lower

Institutional Banking

Rank #4 in Corporate/Institutional Banking by revenue, deposit, and loans & advances Build capabilities to play and harness opportunities in key sectors of the economy Deploy corporate e-payment solutions to better serve customers’ needs and enhance revenue

Financial Markets

Rank #1 Project & Structured Finance Bank in Nigeria

Rank #1 Treasury & Financial Markets Bank in Nigeria Enhanced revenue potential by deploying financial markets offerings to larger pool of customers Increase transaction volumes by transferring Access’ efficiency, expertise and execution capabilities Opportunities to reduce cost of funds by deploying Access’ risk governance practices

Plans for Intercontinental Subsidiaries


Intercontinental Bank Ghana Limited

Intercontinental Bank United Kingdom

Intercontinental Bank has operating subsidiaries in Nigeria, Ghana and UK:

Intercontinental Bank Ghana will be merged with Access Bank Ghana to create the fourth largest lender in the Ghanaian market

Intercontinental Bank United Kingdom will be sold to suitable investors in line with FSA requirements

Intercontinental Finance and Investments Limited

Intercontinental Securities Limited

Intercontinental Homes Savings and Loans Limited

Intercontinental Registrars Limited

Intercontinental Capital Markets Limited

Intercontinental Wapic Insurance Plc.

Intercontinental Properties Limited

Intercontinental Trustees Limited

Intercontinental Bureau de Change Limited

Flexmore Technologies Limited

Banking Subsidiaries

Non- Banking Subsidiaries

Non-banking subsidiaries present a significant opportunity for building capital internally given that a number of the investments have been written down

They also present the opportunity of reviewing the universal banking license in the context of a large scale business franchise which Access Bank now becomes by virtue of this business combination

Action

Action


Strategic Rationale



Financial Impact


Agenda


Benefits to Stakeholders


Nigerian Banking Sector / Economy

Access Bank Stakeholders

Intercontinental Bank Stakeholders

To sustain a robust ROE, Access Bank needs to achieve scale. This transaction facilitates that

goal

Supports Access’s growth ambitions enabling the Bank to accelerate the realization of its

objectives

Enlarged distribution network for Access Bank

Low cost of acquisition.

Enhanced Industry position and risk rating

The merger safeguards a significant degree of capacity in the Nigerian banking sector that would

otherwise have been lost

The transaction is of systemic importance. Careful consolidation of the banking sector is essential

to the future stability and growth of the Nigerian economy

Transaction will enable shareholders to salvage value despite a negative NAV position

Facilitate the survival of the Bank and save it from possible liquidation;

Intercontinental Bank will remain part of one of Nigeria’s leading banking institutions;

Position the Bank for realization of operational synergies through the future merger with Access

Bank;

Documents

Business Combination With Intercontinental Bank Plc[1][1]