Implications of Access, Diamond Banks Becoming Single Financial Institution … What Customers Stand To Gain

Left: Herbert Wigwe, CEO, Access Bank and Uzoma Dozie, CEO, Diamond Bank.

By Tunji Faleye

The recent cheering news that Access and Diamond banks will start operation as one financial institution on April 1, 2019 has been described as a good development. From all indications, it is a step by the new enlarged bank towards becoming bigger, better and stronger Access Bank, one of Africa’s largest banks by number of customers.

In a joint statement released by the two financial institutions recently, the Chief Executive Officers of both Access Bank and Diamond Bank, Mr Herbert Wigwe and Mr Uzoma Dozie respectively confirmed the taken off of the banks as a single financial institution as approved by the shareholders of the two lenders.

With this bold step taken by the shareholders of the two financial institutions, and the resultant receipt of High Court permission, Security and Exchange Commission and Central Bank of Nigeria regulatory approvals, it is certain that customers will begin to enjoyed better services as the merger has put the bank in a vantage position to be a dominant force in the country’s banking sector.

Road To Access, Diamond Banks’ Merger

In 2017, signs began to emerge that Diamond Banks looked unhealthy and this led to the sale of the Bank’s subsidiaries in the United Kingdom and West Africa. In spite this bleak look, the bank management explained that the sale of the subsidiaries will enable the bank focus on the retail banking opportunities available in Nigeria.

Interestingly, some months after this, the bank also announced that, Mr. Oluseyi Bickersteth, Chairman of the board who was appointed few months resigned his appointment. What followed immediately after his departure was the resignation of the three Non-Executive Directors comprising, Juliet Anammah, Aisha Oyebode and Messrs Rotimi Oyekanmi from the Board of Diamond Bank Plc with immediate effect for personal reasons. These serial resignations became a pointer that all was not well within the bank.

Again, on November 30, the bank further announced that it would now trade as a national bank, having relinquished its international operating licence and that its shares, assets and liabilities will be absorbed by Access Bank. Under the new arrangement, the shareholders including Dozie family will get two Access Bank shares for every seven Diamond Bank shares owned.

Incidentally, Access Bank is not new to merger and acquisition, hence the acquisition of Diamond Bank was smoothly concluded. It will be recalled that beginning 2011 and effectively in 2012, Access Bank took over the defunct Intercontinental Bank Plc. Despite the fact that the acquisition was trailed by controversies, the bank emerged stronger and bigger and it is still waxing stronger till today.

What Customers Stand To Gain

In a joint statement released by both Wigwe and Dozie, the two CEOs of the banks said, “We are delighted that shareholders of both companies supported the merger. It is testament to what we have said before: together we are stronger and can offer more opportunities for our employees, more products and services for you, our customers and more benefits for all our stakeholders.”

They added, “Our team of brand experts have been busily working in the background and are making good progress to create a brand that is a fusion of Access Bank and Diamond Bank. This new brand will reflect both banks’ shared purpose to help people achieve their dreams and, in doing so, for Africa to take its place on the world stage.

“As you know, we’re looking at expanding XclusivePlus and DiamondXtra to increase benefits and payouts, as well as growing our branch network to offer even more convenience. Creating even higher standards of customer service is one of our priorities with this proposed merger. And with Access Bank’s financial strength and prudence, you can be rest assured that your savings are safe.”

Customers’ Reactions

Many customers have applauded the announcement that the new enlarged Access Bank will begin operation as a single bank on April 1. They have described it as a welcome development, believing that this will mark the beginning of new things for the financial institution and the country’s banking sector.  They are particularly happy that the acquisition of Diamond Bank was smoothly completed with global standard, hoping that more innovative ideas will be introduced by the new bank to the benefit of the shareholders and the bank’s customers as a whole.

For Sola Adeyeye, a resident of Ikeja, Lagos, “Access Bank has to take curious but comprehensive steps to improve on its services in order to satisfy its customers now that the banks is fast becoming Africa’s largest banks by number of customers.”

He added that more Nigerians have been yearning for stronger and healthy bank that customers will have the assurance that their money/shares are secured.

Similarly, Desmond Chukwuemeka, a customer based in Lagos said, “this is a good year for the customers and shareholders of the bank. It is highly commendable and it shows that the two banks have foresight and have the interest of their customers at heart. If you cast your mind back to many people that have lost money to some banks due to insolvency or other circumstances, you have no choice than to applaud the merger, which I believe will be of great benefits to the customers and shareholders.”

Analysts’ Opinion

Despite the cheering announcement by the managements of the two banks, picking April 1 as the date to commence operation, analysts are of the opinion that the management of the new enlarged Access Bank needs to be focused and follow global standard in banking business.

They say the merger is worthy of emulation and advise other banks to also look into merger and acquisition in order to become competitive at the world stage.

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