By Mark A. Upaa
In principle, Access Bank and Diamond Bank Plc have obtained approval from the Apex banking authority, and Principal regulatory bodies; the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) on proposed merger plans. Mr Victor Etuokwu, Access Bank executive director, Personal Banking, said in Lagos recently, that CBN and SEC had granted both banks approval in principle for the merger process to move forward. Etuokwu said that the banks were awaiting the final approval which would be granted after convening their respective shareholders meeting.
“So far, we have gotten to the second level of approvals. There are three approvals that we require for this process. “The first one is the pre-order approval which is like the first approval, the next approval is the approval in principle. “The final approval comes after you have convened your shareholders meetings,’’ Etuokwu also said. It is widely expected that both banks will convene shareholders’ meetings before the end of February, noting that the approval would be taken to court once approved by the shareholders. Etuokwu said it is the goal of both banks management teams to complete all the outstanding processes including final approval within the next 60 days. He said that the new bank would remain committed to retail and corporate banking to drive financial inclusion for desired growth and development.
Concerning staff retrenchment, Etuokwu said that members of staff would be retrained for different roles and new challenges, he also attempted to address the ‘new’ banks solution to overlapping. “Staff will be retrained for new roles, where there are overlaps, one of the branches may be converted to an e-branch or Automated Teller Machine (ATM) gallery.’’
Mr Robert Giles, in charge of retail, Diamond Bank said that integration of both banks had already commenced, with the goal of seamless service delivery the desired end-point. Giles said that ATMs of both banks could be used by customers at no cost, noting that they were committed to reducing any cost impact on customers.
Mr Herbert Wigwe, Access Bank’s chief executive officer, at a joint news conference recently said it had already finalised terms and obtained regulatory approvals for a Tier II capital issuance to raise $250million available for drawdown in January 2019. He said that the bank had also obtained “No Objection’’ from the CBN to undertake a Rights Issue to raise up to N75 billion or $207 million in the first half of 2019. Wigwe said that shareholder approvals and other regulatory approvals to that effect would be obtained before the offer opens. He noted that the fund raising exercise would accelerate the capital management plan to support retail growth previously set out in the Access bank five-year strategy.
The aquisition of Diamond bank by Access Bank has been anticipated since the last quarter of 2018. But it had been vigerously and vocally rejected by a segment of shareholders on the side of Diamond bank plc. But with the recent show of confidence by executives on both board of the participating banks, it would seem the deal is finally sailing through. It remains to be seen if the single largest obstacle (a block of Diamond bank shareholders) have been given sufficient assurance and incentives to back down and capitulate to the creation of a banking behemoth that will once more alter the banking landscape in Nigeria.