The corporate marriage between Access and Diamond Bank is expected to increase their market reach, customer convenience and accelerate financial inclusion which both banks have pursued separately following shareholders’ approval yesterday.
The banks recently disclosed that they had been granted approval in principle on merger plans from the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC), and have been awaiting the final approval to be granted by the shareholders to complete the process.
Speaking at the court ordered meeting of Access Bank with its shareholders in Lagos yesterday, Group Managing Director, Access Bank Plc, Herbert Wigwe, while adding that the bank has recognized the significant growth opportunity in retail banking, explained that with the merger, the transaction presents a unique opportunity to accelerate its retail franchise and prospects of becoming the leading retail bank in Nigeria and Africa.
Wigwe noted that with respect to the bank’s capital adequacy ratio (CAR), it issued a tier-2 capital raising exercise which has been completed and based on the retained earnings which it has, there is no need for a rights issue.
According to him, Access Bank is working to ensure that shareholder value is maximized and with existing capital and the retention it has with the tier-2 supporting, the bank has enough capital to consummate the transaction. “Even though the merger seems like a bailout to you shareholders, the important thing is that the merger is being consummated with an institution which also has significant value. Diamond Bank brings over N1 trillion in low cost deposits and if we were to chase that our own, it would have taken time, so as we embrace Diamond Bank into the family, let us also know that Diamond Bank as an institution also had reasonable value”.