Reports reaching us state that Nigeria’s Access Bank is in talks to acquire Diamond Bank Plc. It was gathered that this is infact not a merger of the two banks but a complete acquisition as Diamond Bank Plc is looking for ways to settle its huge debt and escape regulatory intervention.
This has set panic to users of Bank Plc as many begin to wonder if their funds are safe. According to The Nation newspaper, the deal is expected to be completed in the first quarter 2019 and the two banks have reached an agreement in broad terms on the acquisition.
The acquisition deal began from Diamond Bank directors who were in search of a move against possible regulatory intervention.
The discussion was said to have been premise on its huge Non Performing Loans (NPLs) portfolio put at over N150billion. “It’s a complete acquisition and not a merger,” the Nation quoted an anonymous source who is familiar with the transaction.
The source also disclosed that Access Bank directors have examined the proposal and accepted to acquire the entity.
The case deteriorated to the point where 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.
