Soon, Diamond bank will be no more.First quarter of next year is take off time.“t’s a complete acquisition and not a merger..Access Bank is set to add Diamond Bank’s portfolio to its assets in the next few months…one of the major considerations that swayed Access Bank’s directors in accepting the offer was the large branch network of the lender.
It was gathered that both financial institutions have reached an agreement in broad terms on the acquisition. What is left is the valuation of assets, with a view to determining the level of compensation and systems’ integration, the sources said, pleading 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.
However, the agreement so far reached, it was understood, will not alter the name of Access Bank nor its management structure.
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.”
“ The CBN encouraged the ongoing arrangement, given the fate that befell the defunct Skye Bank a few months ago. The apex bank gave its consent and approval for the actualisation of the marriage. ”
CBN’s un-alloyed support for the emerging entity followed its unpreparedness to commit any further huge funds for the rescue of any wavering bank.