There are strong indication that Access Bank has struck a deal with Diamond Bank shareholders and paid for the bank shares. This means that Access bank will soon take over the Diamond brand if the transaction is approved by the Central Bank of Nigeria. Those who are in the know of the transaction said that the transaction will announced soon by the CBN after proper verification of the exercise.
CBN it was gathered facilitated the deal in order to ensure that Diamond bank did not go under and cause systemic distress in the financial services sector. It will be recalled that two weeks ago Diamond Bank announced its decision to drop its international operating licence to focus on national operations following capitalisation issues.
Uzoma Dozie, the bank’s chief executive officer, confirmed the development in a statement released on Friday. He has said “With this approval, the bank will cease to operate as an international bank. The re-licensing as a national bank supports Diamond Bank’s objective of streamlining its operations to focus resources on the significant opportunities in the Nigerian retail banking market, and the economy as a whole.
“The move follows Diamond Bank’s decision to sell its international operations, which included the disposal of its West African Subsidiary in 2017 and Diamond Bank UK, the sale of which is currently in its final stages. The change to national bank status also enables the bank to maintain a lower minimum capital requirement of 10 per cent, as against 15 per cent required for international banks.”
According to an analyst Jude Fajokwu in a resent research publication “Diamond Bank demand deposits had declined by 38 per cent while savings deposits (expensive) rose by 87 per cent from the last quarter of Alex Otti in September 2014 to the last quarter of Uzoma Dozie in September 2018. Deposits have declined by N190 billion and gross loans have risen by only 5 per cent over a four-year period. Despite this, impairments have risen by 71 per cent over the four-year period from point to point.
Uzoma Dozie has only succeeded thus far in reducing major expenses as he seeks to boost the bottom-line. He has reduced the bank’s headcount and in my opinion reduced some cadre of salaries; this led to a 40% reduction in personnel expenses and other operating expenses have decreased by approximately N1billion”.
