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. Fortunately, this is not a bank failure but a merger between a Tier 1 (Access Bank) and a Tier 2 (Diamond Bank) bank respectively.
What happens to Diamond Bank depositors?
Depositors with Diamond Bank must be wondering, what happens to my deposits with Diamond Bank. This is a pertinent question since it appears Access Bank is the stronger of the two banks and Diamond Bank appears to be the bank in need of capital.
Results for the nine months ended September 30, 2018, show the bank had ₦1 trillion in deposits from customers. These comprised ₦383 billion in demand deposits, ₦452 billion in savings deposits and ₦231 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.
CBN’s take on bank takeovers
The CBN had this year when it announced the revocation of Skye Bank’s operating licence, maintained that all deposits would be secure.
“We wish to assure all depositors that under this arrangement, their deposits shall remain safe.”
The proposed merger between Access Bank and Diamond Bank is however different as it does not require any capital injection from the CBN. Thus, even in extreme cases where the CBN has had to inject capital or take over banks, depositors funds have always been safe. We, therefore, do not see any difference in this situation as depositors funds will be safe.
Is there any need to close my Diamond Bank account
Except you are not comfortable being a customer to Access Bank, there is absolutely no need to close your account with Diamond Bank. This does not mean caution should be thrown out of the window but we strongly believe that the outcome of the merger will produce a stronger bank in terms of customer 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.
For several other Diamond Bank accounts, particularly premium banking services, it may not be wise to retain such accounts particularly if they attract high charges in exchange for unique services. The services may not be as excellent considering the pressure of the merger and may not be worth it. Such accounts may be moved to a regular account to avoid undue charges.
Buhari nominates Okonjo-Iweala as DG World Trade Organization
President Muhammadu Buhari nominated the former Minister of Finance and Coordinating Minister of the economy, Ngozi Okonjo Iweala, as the Director-General of the World Trade Organization (WTO).
President Muhammadu Buhari has nominated the former Minister of Finance and Coordinating Minister of the Economy, Ngozi Okonjo Iweala, as the Director-General of the World Trade Organization (WTO).
This was seen in a tweet posted by the Presidential aide on Digital and New Media, Tolu Ogunlesi, in the early hours of Friday, June 5, 2020.
In the statement, Ogunlesi said that the current Director-General of the intergovernmental organization, Roberto Azevedo, is stepping down from his position on August 2020, a year ahead of the end of his tenure.
Azevedo, who has been the head of the WTO since 2013, is stepping down at this critical period of global economic crisis and the trade war between the United States of America and China.
This means that the election that was earlier scheduled for 2021 when his tenure was supposed to expire might be coming up much earlier for a new four-year term.
Tolu Ogunlesi in his statement said, ”President Muhammadu Buhari has nominated Okonji-Iweala as Nigeria’s candidate for the position of the Director-General of World Trade Organization. DG Azevedo is stepping down in August 2020, a year earlier, so the election of the new DG, originally scheduled for 2021, may take place much earlier”.
DG Azevedo is stepping down in August 2020, a year early, so the election of a new DG, originally scheduled for 2021, may take place much earlier.
— tolu ogunlesi (@toluogunlesi) June 4, 2020
Just-in: AfDB board agrees to an independent probe of Akinwumi Adesina
The independent review shall be conducted by a neutral high calibre individual with unquestionable experience, high international reputation and integrity within a short time period of not more than two to four weeks maximum, taking the Bank group’s electoral calendar into account.
The Bureau of the Board of Governors of the African Development Bank (AfDB), has agreed to authorize an independent review of the report of the ethics committee of the bank’s board of directors on the allegations levied against the President of the Bank, Akinwumi Adesina.
This was contained in a communique which was released and signed by the Chairperson of the Bureau of Board of Governors, Ms Niale Kaba, after the meeting of the bureau board of governors on June 4, 2020, with respect to the complaints against the President of the bank.
In taking the decision, the Bureau agreed that the ethics committee performed its role on this matter in accordance with the applicable rule under resolution B/BG/2008/11 of the board of governors and that the Chairperson of the Bureau of Board of Governors performed her role in accepting the findings of the ethics committee in accordance with the said resolution.
The bank’s board of governors in its statement said, ‘’Based on the views of some Governors on the matter and the need to carry every Governor along in resolving it, the Bureau agrees to authorize an independent review of the report of the ethics committee of the board of governors relative to the allegations considered by the ethics committee and the submissions made by the President of the Bank Group thereto in the interest of due process.
‘’The independent review shall be conducted by a neutral high calibre individual with unquestionable experience, high international reputation and integrity within a short time period of not more than two to four weeks maximum, taking the Bank group’s electoral calendar into account.
‘’The Bureau agrees that, within a three to six months period and following the independent review of the ethics committee report, an independent comprehensive review of the implementation of the bank’s group whistleblowing and complaints handling policy should be conducted with a view to ensuring that the policy is properly implemented, and revising it where necessary, to avoid situations of this nature in the future.’’
Following the allegations of unethical conducts, questionable appointments and contract awards by a group of whistleblowers and the subsequent clearance of all charges by the bank’s ethics committee, the United States Government, who is the largest shareholder outside Africa, asked for an independent probe of those allegations.
The US treasury secretary questioned the integrity of the committee’s process as well as the internal processes of the bank.
Adesina, a few days ago, met with President Muhammadu Buhari, where he assured of the country’s support towards his travails and his second term bid for the Presidency of the multilateral institution.
FG removes cap on petrol price, allows marketers to fix price
The price cap per liter in respect of Premium Motor Spirit (PMS) is removed from the commencement of these Regulations.
The Federal Government has removed the cap on Premium Motor Spirit (PMS) price, popularly known as petrol.
This was disclosed by the Petroleum Products Pricing Regulatory Agency (PPPRA) via a memo, which was dated March 30, 2020, but realised on May 4, 2020, titled ‘Market Based Pricing Regime for Premium Motor Spirit (PMS) Regulations, 2020.
What it means: With the new development, marketers now have the freedom to fix the price of the commodity and sell above the price given by the agency.
Executive Secretary, PPPRA, Abdulkadir Saidu, explained that the agency would continue to monitor trends in the crude oil market and advise the Nigerian National Petroleum Corporation (NNPC) and oil marketers on the monthly guiding price for the commodity.
“The price cap per litre in respect of Premium Motor Spirit (PMS) is removed from the commencement of these Regulations. From the commencement of these Regulations, a market-based pricing regime for PMS shall take effect,” he said.
Meanwhile, Nairametrics had reported that the agency announced a new retail price band for oil marketers.
In a circular dated May 31st, as seen by Nairametrics, the downstream regulator said oil marketers are now expected to sell petrol within the price range of N121.50 and N123.50. Part of the circular said:
“Please recall the recently approved pricing regime which became effective March 19, 2020, and the provision for the establishment of a monthly price band within which petroleum marketers are expected to sell PMS at the retail stations.”