Diamond Bank denies merger, acquisition talks with Access, others

Diamond Bank
A Diamond Bank front view used to illustrate the story

Diamond Bank PLC on Monday denied reports it is in ongoing discussions with Access Bank Plc over possible acquisition.

The spokesperson of Diamond Bank, Chioma Afe, in a statement sent to PREMIUM TIMES described as rumour the purported ongoing discussions with Access Bank.

“We wish to state categorically that the bank is not in discussions with any financial institution at the moment on any form of merger or acquisition,” Ms Afe said.

A report in The Nation newspapers said Access Bank was on the verge of acquiring Diamond Bank to increase its assets portfolio.

Although the report made no formal attribution for the acquisition plan, it however said the merger plan might materialize latest by the first quarter of next year.

According to the report, apart from an agreement in broad terms reached on the acquisition plan by both banks, both parties would soon commence assets valuation to enable them determine the level of compensation and systems’ integration.

Recent developments in the bank tended to give fillip to speculations about possible crisis in its management and operations.

On October 24, 2018, the bank in a correspondence titled “RESIGNATION OF CHAIRMAN AND NON-EXECUTIVE DIRECTORS,” to the Nigerian Stock Exchange (NSE) confirmed the immediate resignation of the chairman and three non-executive directors.

They include Oluseyi Bickersteth, who was recently appointed the bank’s chairman; Rotimi Oyekanmi, Juliet Anammah and Aisha Oyebode.

The letter to the NSE signed by the company secretary, Uzoma Uja, said the affected directors resigned for varied personal reasons.

But, PREMIUM TIMES learnt the resignations were a fallout of a protracted dispute involving a major investor, Carlyle Group (NASDAQ CG), over the composition of the board of the bank.

In August 2014, Carlyle Group had invested about $147 million in Diamond Bank as the bank made a $305 million rights issue packaged to improve its Tier 1 capital, strengthen its balance sheet and support its continued growth plans.

Announcing the investment November that year, the bank said the proceeds from the rights issue would go into the development of its “IT infrastructure, working capital support and expansion and refurbishment of its branches.”

Diamond Bank directors reportedly approached Access Bank to intervene and offer a lifeline to mitigate the prospects of a possible regulatory intervention that could end with the withdrawal of its operating license.

This comes amidst Diamond Bank’s depleting capital adequacy ratio posing a major challenge due to a high non- performing loans (NPLs) portfolio of over N150 billion.

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