It was celebrations galore at Access Bank over the weekend as the Nigerian Tier 1 bank finally gave the hint that it has acquired Diamond Bank in its quest to become Nigeria’s largest bank.
Recall that rumours of a potential merger deal surfaced a few weeks back to the shock of the investing community. However, both banks issued statements denying that any merger talks were ongoing.
Despite the denials, people familiar with the transaction inform National Daily that the deal was never off the table and had been going on for weeks. Both sides had already facilitated the presence of a due diligence team from one of the big three audit firms.
According to a source, a board meeting was held over the weekend approving the merger terms after weeks of negotiations surrounding several aspects of the transaction. Both banks are now expected to formally seek a shareholder agreement before applying for the approval of the CBN and Securities & Exchange Commission.
Meanwhile as the news of Access Bank’s merger with tier two lender Diamond Bank continues to reverberate across the country, the primary concern for many Nigerians will be what happens to their deposits.
Echoes of banking failures in the past have left many Nigerians wary of news concerning a merger or acquisition, especially as all parties involved are yet to issue any official statements.
Results for the nine months ended September 30, 2018, show the bank had N1 trillion in deposits from customers. These comprised N383 billion in demand deposits, N452 billion in savings deposits and N231 billion in term deposits.
Since Access Bank is the dominant entity, Diamond Bank customers would be absorbed into the Access Bank fold and issued new account numbers. This could take weeks to happen but before then, we expect regular banking activities to continue without many hitches.
Deposits with Diamond Bank are and will remain safe, as the bank is in no form of financial distress. The Central Bank of Nigeria (CBN) would also be on hand to provide any required support should there be panic withdrawals. The apex bank would most likely issue a statement, before the close of business today, of some sort assuring customers of the safety of their deposits.
Diamond Bank is known for its tech-driven solution banking so it is also likely that Access Bank will acquire some of these technological assets and incorporate it into its banking services.