Access Bank is again set to acquire another Nigeria key bank Diamond Bank. The deal has been sealed and the acquisition is ready to take off in the first quarter of 2018.
It was a huge success when the bank bought off the Intercontinental bank in 2005. This is another milestone for the fastest growing Acess Bank. When the operation finally kick-off all Diamond bank customers will switch to Acess Bank Nigeria.
According to the report by the Nation newspaper, Access Bank and Diamond bank have reached an agreement in broad terms on the acquisition. What is left is the valuation of assets, with a view to determining the level of compensation and systems’ integration, the sources said, pleading not to be named because they are not allowed to talk to the media on the matter.
Driving to why Diamond bank took the decision to sell off the bank. The Nation noted that the impending acquisition was triggered by Diamond Bank directors who approached Access Bank for intervention in a bid to stave off a possible regulatory intervention that could lead to the withdrawal of the lender’s operating licence in the light of the bank’s depleting capital adequacy ratio on account of a huge Non Performing Loans (NPLs) portfolio put at over N150billion
Diamond Bank chairman, 3 directors quit
Oluseyi Bickersteth, the bank’s chairman and three non-executive directors of Diamond Bank Plc resigned their positions.
Uzoma Uja, the company secretary, in a corporate filing said the resignation varied for personal reasons.
The development, analysts and banking sources, said is to pave way for new capital injections for the new investors to have more feel about the banking operations.
Diamond Bank had denied capital injection talks with new investors. The bank said it will notify the authorities when it is taking in any capital injection.
“While we recognise the need to expand our options in the short term, we have no concrete new development to report and will notify The Exchange once there is any, ” Diamond Bank had said in a regulatory filing.
Analyst says Diamond Bank needs more capital to survive
A banking source confided in Business Insider SSA that Diamond Bank is looking for ways to settle its huge.
“They need more equity for the business to survive and move forward,” the source told BISSA on Monday.
Diamond Bank reported a loss after tax of N9.01 billion in its 2017 full-year financial results as against a profit after tax of 3.49 billion in the preceding year