Nigeria: Access, Diamond Banks Sign Agreement to Merge

Photo: This Day
Nigeria's Access Bank and Diamond Bank to merge
17 December 2018

Access Bank Plc and Diamond Bank Plc yesterday ended months of speculations over their future when they finally agreed to merge, signing a Memorandum of Agreement, which if approved by the Central Bank of Nigeria (CBN) and the Nigerian Stock Exchange (NSE), would move Access Bank, the principal partner, from number four to number two or number one in the nation's banking hierarchy, if the current growth trajectory of Access Bank is maintained.

THISDAY confirmed last night that the boards of the two banks met at about 7PM, yesterday and passed the resolutions agreeing to merge subject to regulatory and shareholder approvals.

A reliable source close to the merger talks told THISDAY emphatically, "The deal is done, what is left is for the Central Bank of Nigeria to stamp its seal of approval."

THISDAY had reported exclusively last October, about moves by Diamond Bank to seek fresh funds to help it shore up its capital base and shepherd it out of the headwinds it was experiencing.

The newspaper reported the decision of some of its directors, including the chairman, Mr. Seyi Bickersteth, to stand down, paving the way for new investors.

THISDAY obtained copies of letters of resignation of the directors, in which Bickersteth said, "It has been an honour to serve on the board of the bank as chairman, and I will continue to support the bank in every way possible."

Other directors who resigned were, Ms. Aisha Oyebode, Mr. Rotimi Oyekanmi and Ms. Juliet Anammah.

Diamond's Group Managing Director, Mr. Uzoma Dozie, bank sources told THISDAY, then, was to steer the transition period preparatory to his own resignation now expected once the merger is concluded.

Diamond Bank, one of Nigeria's retail banking champions, had recently faced headwinds with non-performing loans and profitability as it faced challenges with its lending to indigenous oil sector, following the collapse of oil prices.

Access Bank, looking to expand its own frontiers, sources said, cashed in on the opportunity and made its move, which culminated in yesterday's signing of the MoA.

Commenting on the merger agreement last night, Access Bank's Chief Executive Officer, Mr. Herbert Wigwe, told THISDAY, "Access Bank has a strong track record of acquisition and integration which has a clear growth strategy.

"Access and Diamond Banks have complimentary operations and similar values. A merger with Diamond Bank with its leadership in digital and mobile-led retail banking could accelerate our banking strategy as a significant corporate and retail bank in Nigeria and a pan-African financial services champion.

"Access Bank has a strong financial profile with a robust capital of over 20 per cent CAR (capital adequacy ratio) as at 30 September, 2018.

"We believe that this platform, together with the two banks' focus and innovative financial inclusion and sustainability will bring benefits to the shareholders of Access and Diamond Banks.

A CBN official in the Financial Services Department, who did not want to be quoted because he was not authorised to speak, said, "If approved, Access Bank would be the right anchor and shock absorber for Diamond Bank depositors and shareholders. At CBN, our mandate is to protect depositors' funds. This merger does that."

The merged entity is expected to trade as Access Bank Plc with Diamond Bank logo subject to approvals.

See What Everyone is Watching

More From: This Day

Don't Miss

AllAfrica publishes around 600 reports a day from more than 150 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.