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.

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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.

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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.

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