Access Bank will embark on a $200 million fundraising exercise to keep its capital well above the regulatory requirements. According to Financial Times, Access Bank intends to launch a subordinated rights issue.
Herbert Wigwe, CEO Access Bank, said Diamond would write off all its bad loans before the merger goes through.
“We won’t have new bad loans coming to the enlarged entity,” he said.
According to Wigwe, the new bank would have a customer base of 27 million, including 12 million with mobile accounts, making it Africa’s biggest bank by customers.
People close to the transaction said there would be substantial synergies. As many as 100 of the banks’ combined 650 branches would be shut with more than 1,000 of the merged entities’ 6,800 staff expected to lose their jobs.
CBN’s green light
The Central Bank had in a letter dated December 17, 2018, addressed to the Managing Director/CEO of Access Bank and signed by Director of Banking Supervision, Mr Ahmad Abdullahi, said it had no objection to the proposal, advising the commercial bank to proceed to obtain other necessary regulatory approvals for the merger.
However, the Securities and Exchange Commission (SEC) said it is still waiting for a formal application from the banks on the merger. According to the apex capital market regulator, however, it is aware of the intention of the banks to go into a merger.
The shares of Access Bank is currently trading at N7.70, while the shares of Diamond Bank is currently trading at N1.14 on the floor of the Nigerian Stock Exchange.