Access Bank targets additional $250m Tier II issuance
This is in addition to the planned fund raising exercise of about N75 billion ($207 million effective second half (H2) of 2019, to keep its capital well above regulatory requirements.
Already, the bank has obtained the necessary regulatory approvals to commence issuance, while shareholders’ endorsement would also be sorted before the offer opens.
The Group Chief Executive Officer (CEO), Access Bank Plc, Herbert Wigwe, at a joint news conference to announce the details of the proposed merger with Diamond Bank Plc, in Lagos, yesterday, said the fund-raising would accelerate management’s plan to support retail growth, as well as create a stronger capital base to support the bigger entity.
He also said the bigger entity is ready to absorb the staff of Diamond Bank at the completion of the deal by end of June 2019, without any disengagement.
According to him, the decision is to enable Access Bank leverage the best talent of both institutions, and create a leading banking franchise in Nigeria.
“The idea is to re-skill people, and get them to perform and be at the same level across board in the institution and banking industry,” adding that Diamond Bank’s active customer base and strong retail capability is a competitive force that will drive performance and overall growth of the bigger entity.
On the benefits of the merger exercise, Wigwe said: “the merger will form a leading Tier 1 Nigerian bank, and the largest bank in Africa by number of customers, spanning three continents, 12 countries and 29 million clients.
It brings together treasury, risk management, and corporate banking expertise with strong retail and digital banking capabilities to create a financial institution operating across the full suite of products for all customer segments.
“Transaction to be concluded via Scheme of Merger following Access Bank and Diamond Bank Court Ordered Meetings expected in March 2019, to approve terms. Subject to shareholder approvals, final SEC, CBN, and PenCom regulatory approvals and FHC sanction expected before end of H1 2019.
“Cost of synergies conservatively estimated at N30 billion per annum, pre-tax to be fully realised within three years post-completion, and further revenue and balance sheet synergies to be evaluated by joint implementation committee.”
On his part, the Managing Director, Diamond Bank Plc, Uzoma Dozie, insisted said the merger would create a significant potential for sustainable long-term growth to the benefit of its customers, employees and shareholders
According to him, the combination of two strong brands, with shared values and complementary strengths will be a strong force for positive change in the Nigerian and African retail landscape.
He added that Diamond Bank will also benefit from Access Bank’s strong culture of risk and capital management expertise with a clear strategy for sustainable growth.
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