In view of the ongoing merging process between Access Bank Plc and Diamond Bank Plc, industry stakeholders have predicted the emergence of more mergers in the Nigerian banking sector.
According to some players in the financial services sector, the merger between the two lenders could most likely trigger more mergers and acquisitions.
While the stakeholders see this as a good development, they are optimistic of more of such happening in the banking industry.
Even the Chartered Institute of Bankers of Nigeria (CIBN) said in its fifth annual economic outlook with the theme, ‘Implications for businesses in Nigeria 2019,’ that more mergers were feasible.
Part of the report on the economic outlook, which was presented by Olufemi Fabamwo, read, “Access Bank and Diamond Bank’s combination is expected to be consummated in 2019. Further opportunities and appetite for such mergers and acquisition in the banking sector may be witnessed.”
Similarly, the Managing Director/Chief Executive Officer of Heritage Bank, Ifie Sekibo, said there might be more mergers and acquisitions in the economy. He also added that he would be happy to see that happen, even as more investors continue to enter the country.
“We expect much more investments and I expect that as those investments take place, mergers and acquisitions may actually take place this year; both local and foreign.” -Sekibo
Meanwhile, for the Former President of the Association of National Accountants of Nigeria, Dr Sam Nzekwe, the merger would be most welcomed if it would produce a mega bank.
In his words-
“We are looking at mega banks that would be able to do their financial intermediation when they merge them, that is, borrowing money from the surplus unit and giving it to the deficit unit. That is the purpose of banking.
“If the merger between the two banks is going to bring a mega bank, it is going to be good because we don’t have mega banks in Nigeria and it is difficult to get long term loans. So we need a bank that can do that through a merger.”
What is expected of Diamond Bank’s merging with Access Bank
The ongoing merger process between Access Bank Plc and Diamond Bank Plc, which was announced last year (2018), is programmed to be concluded by 2019 Q1.
The fusion of the two banks is expected to result in the creation of a new and enlarged Access Bank brand, which would officially start operating as one business entity on April 1, 2019.
Part of the expected outcome of the merger, according to the two banks, is that Diamond Bank would benefit from Access Bank’s risk and capital management expertise, while Access Bank would take advantage of Diamond Bank’s retail banking expertise.
Together, the two banks were expected to 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.
The merger is expected to lead to over 600 branches, while there would be same day clearing of cheques for Diamond and Access customers in both banks.