Again Diamond Bank Plc Denies Acquisition By Access Bank

The management of Diamond Bank Plc on Monday have once again denied the bank’s acquisition by a sister financial institution Access Bank Plc.

According a statement from the bank sent to nationawire and singed by its Media Relations Officer, Ezechinyere Anyanwu, he said the rumor in the media stating that the Bank is purportedly in discussions with Access Bank Plc to acquire the Bank is not true.

The media was only last week a washed with information that the bank was in talks with a foreign investor. This the bank debunked.

The statement further reads that: “We wish to state categorically that the Bank is not in discussions with any financial institution at the moment on any form of merger or acquisition. We trust that the above clarifies the position of the Bank with regards to the rumor on the various media platforms” it added.

Reports in some of the media on Monday had it that talks on the acquisition was on, quoting sources who said the fusion is set for the first quarter of next year.

The report quoting the sources further said it also gathered that both financial institutions have reached an agreement in broad terms on the acquisition, saying what is left is the valuation of assets, with a view to determining the level of compensation and systems’ integration even as it pleaded not to be named because they are not allowed to talk to the media on the matter.

“It was learnt that the development leading to 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.

According to the Nation newspaper, it said it gathered that Access Bank directors examined the proposal and, after series of meetings and evaluations, accepted to acquire the entity. However, the agreement so far reached, it was understood, will not alter the name of Access Bank nor its management structure.

“It’s a complete acquisition and not a merger,” a source, who asked not to be identified, but who is familiar with the transaction, said, adding that one of the major considerations that swayed Access Bank’s directors in accepting the offer was the large branch network of the lender. “It’s burgeoning NPLs, however, was of serious concern to Access Bank and almost becoming a disincentive, but it has been addressed,” the source added.

“It was also gathered that the CBN is well acquainted with the development. The regulator’s acquiescence to the deal was informed by the recent event that led to the liquidation of Skye Bank, and the apex bank not being disposed to following that route because of the huge cost implication that a bailout of Diamond Bank might require, encouraged the discussions, “and the regulator is pleased with the level of discussions so far” it added.