Access Bank plc has finally taken over Diamond Bank, thus creating one of Nigeria’s biggest banks by assets size and branch network.
Going by the scheme of merger earlier announced by both banks, Diamond Bank ceases to exist as a going concern and a deposit money bank from Monday this week. This also implies that Uzoma Dozie would have vacated his plum job as the managing director of Diamond Bank.
A close source inside Access Bank told The Nigerian Xpress on Friday that Nigerians will wake up Monday morning to behold a rebranded Access Bank with fresh logo (perhaps that of Diamond) and colours, even as all branches of defunct Diamond Bank will now be decorated in Access Bank colours.
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Last week, the Securities and Exchange Commission (SEC) suspended the shares of Diamond Bank from being traded on the floor of the capital market signaling that the merger has in effect come into being. And in the spirit of the merger, Access Bank appointed Mrs Chizoba Okoli, an Executive Director with Diamond Bank as Executive Director, Banking Division. The bank is expected within the month to effect some changes and make more appointments to achieve a seamless transition
The new Access Bank will have a customer base of 27 million people, including 12 million with mobile accounts. Before now, Access Bank had offered N3.13 a share for Diamond Bank, against a recent price of just N0.87. It will pay a share in cash and swap two new Access Bank shares for every seven Diamond shares.
Post merger, Access Bank has indicated interest to issue additional shares of 6.6 billion shares to accommodate the shareholders of Diamond Bank. Assessing the impact on current outstanding shares of Access bank of 28.9 billion, there is an estimated increase in total shares post consolidation to 35.5 billion.
Analysts are of the view that while the merger appears positive for shareholders of Diamond Bank, it may not likely give those of Access Bank the desired upper hand giving the bottlenecks in terms of collapsing of structures as well as dilution impact on profitability.
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Before the merger, Diamond Bank had struggled with deterioration of about 90 per cent of its commercial loan book. Its shares fell more than 50 per cent after downgrades by both Moody’s and Standard and Poor’s.
The acquisition of Diamond Bank by Access did not come as a surprise as the former institution had been grappling with large dose of non-performing loans. The bank’s overall performance in the last four years did not leave much to cheer. The bank did not declare any dividend to shareholders since 2013 and was only meeting the Central bank of Nigeria (CBN) Capital Adequacy Ratio (CAR) by the benevolence of the apex body’s forbearance.
The bank’s loan exposure to the private sector was N984.3 billion, which was later reduced to N727.694 billion. Diamond bank had the previous year recorded a N9 billion loss for the year ended December 31, 2017.