Barely one week after Access Bank and Diamond Bank made public their proposed merger, the former had finalized plans to raise $250 million in Tier 11 capital.
Herbert Wigwe, Chief Executive Officer, Access Bank, disclosed this in Lagos on Wednesday, December 19, 2018, at a press briefing to provide more details on the merger between the two banks.
“Access Bank has already finalized terms and obtained regulatory approvals for a Tier II capital issuance, which will raise $250 million, available for drawdown in January 2019. Access Bank has also obtained “No objection” from the Central Bank of Nigeria to undertake a rights issue to raise up to N75 billion ($ 207 million) in H1 2019. Shareholder approvals and other regulatory approvals will be obtained before the offer opens. This accelerates the capital management plan to support retail growth, previously set out in the bank’s five-year strategy,” Wigwe said.
The merger with Diamond Bank would shoot Access Bank’s customer base to 29 million, Wigwe said, adding that Diamond Bank’s current customer base stands at 19 million, including 10 million mobile users. “Together, the two companies would create one of Nigeria’s leading banks, with 29 million customers, including more than 13 million mobile customers, as well as 3,100 Automated Teller Machines and around 32,000 Point of Sale terminals.”
He added: “Diamond Bank will benefit from Access Bank’s strong culture of risk and capital management expertise and a clear strategy for sustainable growth. Access Bank will take advantage of Diamond Bank’s unparalleled retail banking expertise and strong digital offering.
Corroborating Wigwe, the Chief Executive Officer, Diamond Bank, Uzoma Dozie, said, “We have a pool of very good people that we need to ensure that we maintain value in the combined entity. As per people who want to go or people who want to stay, all depends on performance-driven matrix that both organizations already follow.”
Wigwe also said that the bank would decide if “it wants to go into pension business by retaining the pension licence of Diamond Pension Fund Custodian, which is a subsidiary of Diamond Bank. We will take a very strategic decision whether we will have to sell it or keep it.”
According to him, the signing of the Memorandum of Agreement and announcement of headline terms valued Diamond Bank at approximately N72.5 billion ($200 million) and will see Diamond Bank shareholders receive N3.13 per share in cash and shares.
