Banking

Diamond Bank, Access Bank Merger and the Big Obstacle

Published

6 years ago

18/12/2018

By Dipo Olowookere

One news item that has dominated the capital market space in Nigeria at the moment is the merger between Diamond Bank and Access Bank.

The merger between both parties was confirmed yesterday after initial denials by both banks, while the deal is expected to be finalised before the end of June 30, 2019.

It is important to note that both financial institutions are trading their equities on the floor of the Nigerian Stock Exchange (NSE).

In a release on Monday by Diamond Bank, its board said, “Based on the agreement reached by the boards of the two financial institutions, Diamond Bank shareholders will receive a consideration of N3.13 per share, comprising of N1.00 per share in cash and the allotment of 2 new Access Bank ordinary shares for every 7 Diamond Bank ordinary shares held as at the Implementation Date.

“The offer represents a premium of 260 percent to the closing market price of N0.87 per share of Diamond Bank on the Nigerian Stock Exchange as of December 13, 2018, the date of the final binding offer.”

This deal, according to the Chief Executive Officer of Diamond Bank, Mr Uzoma Dozie, “will create one of Africa’s leading financial institutions.”

Mr Dozie said, “There is clear strategic rationale for the proposed merger and strong complementarities between the two institutions,” noting that, “While Diamond Bank has pioneered Nigeria’s largest technology-led retail banking platform, Access Bank is one of Nigeria’s leading full-service commercial banks.”

He further said, “The board of Diamond Bank believes that the proposed combination of the two operations provides an exciting prospect for all stakeholders in both businesses and will create a financial institution with the scale, strength and expertise to capitalise on the significant opportunities in Nigeria and sub-Saharan Africa more broadly.”

For the CEO of Access Bank, Mr Herbert Wigwe, “Access Bank has a strong track record of acquisition and integration and has a clear growth strategy.

“Access Bank and Diamond Bank have complementary operations and similar values, and a merger with Diamond Bank, with its leadership in digital and mobile-led retail banking, could accelerate our strategy as a significant corporate and retail bank in Nigeria and a Pan-African financial services champion.

“Access Bank has a strong financial profile with attractive returns and a robust capital position with 20.1 percent CAR as at September 30, 2018.

“We believe that this platform, together with the two banks’ shared focus on innovation, financial inclusion and sustainability, can bring benefits to Access Bank and Diamond Bank customers, staff and shareholders.”

While the Central Bank of Nigeria (CBN) is believed to have midwifed this transaction, both shareholders of Access Bank and Diamond Bank will still have to approve the merger, which some have described as acquisition in reality.

However, Business Post analysts are of the view that shareholders of Diamond Bank will want to create a big obstacle to this merger, especially Carlyle Group, an American equity firm, which in 2014 became the leading individual shareholder in the bank with the acquisition of 17.7 percent of the company’s shares. At that time, the US-based company acquired 4.16 billion shares of Diamond Bank at N5.80k each.

While some minority shareholders may not reject the offering because of what Access Bank is putting forward, Carlyle Group, which has been speculated to have called for the resignation of Mr Dozie, may become the biggest hurdle to cross in making the merger see the light of the day.

In our November 27, 2018 article, we highlighted how Carlyle Group may have lost over N20 billion of their investment in Diamond Bank since they joined the lender.

As it has been reported in some sections of the media, the Pascal Dozie family, founder of Diamond Bank, had allegedly first obtained a loan from GTBank Plc, which was later allegedly taken over by Access Bank Plc.

The loan was said to have been used to chase foreign investors out of the bank, especially, Actis, in 2014, which allegedly sold their shares to the Dozie family at N7.50k per unit, receiving over $125 million from the deal.

Business Post gathered from a statement released then that the Dozie family, through Kunoch Holdings, had acquired the 14.8 percent stake of Actis DB Holdings Limited in Diamond Bank. Actis had invested heavily in Diamond Bank in 2007, when it bought the bank’s shares.

With the above, it is anticipated that Carlyle Group might feel cheated in the Access Bank/Diamond Bank deal and might want to fight back by frustrating it, especially when it has been speculated that the Dozie family are favouring Access Bank to take over Diamond Bank allegedly as pay back for the loan they allegedly obtained some year ago to pursue Actis out of the company.

Also from a leaked letter purportedly written by a former Chairman of Diamond Bank, Mr Seyi Bickerstheth, which was later leaked to the media, Carlyle Group has not been in support of this transaction and the leadership of Mr Dozie.

Mr Bickerstheth, who resigned from the bank over a month ago alongside three other non-executive directors, claimed Carlyle Group had wanted a situation where fresh capital would be injected into Diamond Bank for recapitalisation instead of handing over the bank to Access Bank on a platter of gold.

According to letter, the group had insisted that for the cash injection to happen, Mr Dozie will first have to relinquish his position as the CEO.

“After several discussions, the CEO, of the bank who is also a representative of the second largest shareholder Kunoch Ltd, agreed to resign effective January 3, 2019 but would not tender his letter to confirm his verbal notification.

“In response, the representative of CSSAF DBN Holdings therefore at the board meeting held on October 18, 2018 put forward a motion for the removal of the CEO with immediate effect. This was despite continuous negotiations and attempts by members of the board, to provide an amicable solution to this impending shareholder fight and reaching several tentative agreements, which were frustrated by both parties.

“Nonetheless due to technical reasons and reluctance of board members regarding an immediate removal of the CEO, the vote for the removal of the CEO was postponed, pending legal clarifications, which could not be provided by the Company Secretary,” the letter had said.

It had said further that, “The CEO, at the October 18 2018 meeting, had a financial adviser appointed by the executive management without reference to the board to present to the board various strategic options for recapitalization either through an internal rights issue or possible merger with other Tier 1 banks.

“While the board stated that this was to have been presented to the board capital raising committee, it allowed the presentation to be made. The presentation, though based on 2017 financials was still very high level and, was well received by the board and the board directed that the recommendation be passed on to the capital raising committee of the bank to evaluate this along with all other options being considered – new injection of capital by the shareholders, merger with a local bank or position to partner with an international bank not currently operating in Nigeria

“On Friday October 19, 2018, due to the lack of clarity on the motion for immediate removal of the CEO, the representative of CSSAF DBN Holdings informed board members that as a majority shareholder CSSAF DBN Holdings would call for an Extraordinary General Meeting to remove the CEO since the board had not voted on the matter.

“The 4 NEDs then decided that it was becoming a shareholder fight, which they felt could have been averted either by the CEO tendering a letter indicating his resignation effective January 3, 2019 or by CSSAF DBN Holdings accepting to give the Board the responsibility of ensuring the issue is resolved amicably. Purely on this basis, the 4 NEDs wrote to resign their appointments immediately by emails to the Company Secretary to allow the 2 shareholders resolve the impasse.”

If you desire to read the full letter, kindly click HERE For now, what observers are not sure of is if Carlyle Group will approve the merger between Diamond Bank and Access Bank or would want to first force Access Bank to settle their over N20 billion loss before giving the deal its nod.

Banking

Zenith Bank Expands Global Footprint With New Branch in Paris

Published

5 hours ago

29/11/2024

Aduragbemi Omiyale

By Aduragbemi Omiyale

A new branch of Zenith Bank Plc has been opened in Paris, the capital of France, by the United Kingdom subsidiary of the Nigerian lender.

This followed the granting of the final approval by France’s banking regulator, the Autorité de Contrôle Prudentiel et de Résolution (ACPR), in September 2024, allowing the branch to commence operations.

Earlier in November 2023, Zenith Bank strengthened ties with France by signing a Memorandum of Understanding (MoU) with the French Government to establish a subsidiary in France.

The MoU was signed in Lagos by the Founder and Chairman of Zenith Bank Plc, Jim Ovia, CFR, and the French Minister for Trade, Attractiveness and French Nationals Abroad, Mr. Olivier Becht during the French envoy’s visit to Nigeria.

The chief executive of Zenith Bank, Ms Adaora Umeoji, described the opening of the branch as “part of the broad strategy of the bank to extend its footprints across the major global financial centres and our efforts at following our customers’ businesses.”

“[The] Paris branch opening underpins the need to serve our customers and bolster trade and finance relationships between our customers in France and other countries. Zenith Bank’s expansion into France is a very strategic move as Nigeria accounts for 20 per cent of France’s trade with Sub-saharan Africa according to the Franco-Nigeria Chamber of Commerce and Industry (FNCCI).

“Having successfully dominated large parts of Anglophone Africa, we will leverage Zenith Bank Paris operations to lead the Francophone market starting from the Ivory Coast and Cameroun where we will be establishing subsidiaries very soon.

“This will facilitate business and trade flows between the African region and France, which is a major business partner to several African countries,” she said.

Also speaking at the opening of the branch on Wednesday, November 27, 2024, at 21 Rue de la Paix, Paris, the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, said, “I feel that one of the dividends of building trust for Nigerian institutions around the world is this event today, the opening of Zenith Bank in Paris.

“The presence of Zenith here can only help to engender trust of the French business community. They can learn about the opportunities in Africa, and of course, entry into Nigeria can be facilitated. We are happy and we are glad that we are all here to participate in this historic occasion.”

Banking

Stanbic IBTC Bank Introduces Senior Citizens Account

Published

21 hours ago

28/11/2024

Modupe Gbadeyanka

Stanbic IBTC Bank Senior Citizens Account

By Modupe Gbadeyanka

A bank account targeted at Nigerians who are 50 years and above known as Senior Citizens Account has been introduced by Stanbic IBTC Bank.

Senior Citizens Account is an all-encompassing banking solution designed to meet the immediate and long-term financial needs of individuals approaching retirement or those already in their retirement phase.

The package comprises comprehensive features such as zero account opening balance, zero account maintenance fee, free debit card and chequebook, health insurance and telemedicine, wills service and funds management.

Stanbic IBTC Bank described it as an innovative solution exclusively designed for customers in the age category and is expected to serve over 15 million Nigerians estimated to be within this age range, according to Index Mundi.

Through this very thoughtful banking service for the elderly, the financial institution can provide tailored financial services solutions that meet the special needs of this unique clientele.

According to the chief executive of the lender, Mr Wole Adeniyi, it is an excellent opportunity for people who are nearing retirement to consolidate their banking needs, investment management, and wealth transfer across generations and for retirees who rely on Stanbic IBTC Pension Managers to manage their pension funds, to also use Stanbic IBTC Bank to receive their gratuity payments while enjoying excellent benefits.

He said the Senior Citizens Account aims to provide people in their 50s and older with essential support and services, ensuring their financial well-being and stability.

Senior Citizens Account is not just another banking product; it represents a paradigm shift towards creating a banking experience that significantly enhances its users’ lifestyles.

It is crafted to offer senior citizens a sense of financial security, unparalleled convenience, and an improved sense of well-being.

This commitment to exceeding customers’ expectations is further demonstrated by the bank’s initiative to introduce cutting-edge features aimed at making banking services more accessible and convenient.

The financial institution has substantially improved its technical infrastructure, reducing system downtime from 3 per cent to a mere 0.5 per cent.

This reduction in downtime confirms its dedication to providing reliable and uninterrupted service, ensuring that customers’ banking experiences are smooth and hassle-free.

Through these initiatives, Stanbic IBTC Bank reaffirms its commitment to innovation and customer satisfaction, aiming to bridge the gap between modern banking and the evolving needs of the ageing population.

By developing products like the Senior Citizens Account, the Bank addresses a previously overlooked market segment and sets new standards in offering tailored financial solutions that contribute to their overall quality of life.

For individuals interested in discovering more about Vitality Plus and the enrollment process, information is readily available at www.stanbicibtcbank.com or at any Stanbic IBTC Bank branch nationwide. This initiative is part of Stanbic IBTC Bank’s ongoing efforts to refine and adapt its services to meet the evolving needs of its customers better, ensuring that every client, regardless of age, has access to top-tier banking solutions that reflect their lifestyle and aspirations.

Banking

Shettima Promises to be “Chief Promoter” of Moniepoint

Published

2 days ago

27/11/2024

Modupe Gbadeyanka

By Modupe Gbadeyanka

Nigeria’s Vice President, Mr Kashim Shettima, has expressed his delight over the unicorn status attained by Moniepoint Incorporated in October 2024 after it secured a $110 million funding package from Google.

Speaking when the company paid a courtesy visit to him at the Presidential Villa recently, the VP said he was happy with the growth trajectory of the financial technology (fintech) company, charging the team not to rest on its oars.

He promised to be the “chief promoter” of Moniepoint because the firm has become the pride of the country and must be supported by all.

Mr Shettima urged the company to continue expanding its global footprint, referencing his ongoing support for similar initiatives such as Amal Hassan’s Outsource to Nigeria project.

The Vice President described Moniepoint as a “kaleidoscope of colours” because of the diversity of its team, saying it reflects the beauty of Nigeria’s multicultural and multi-regional identity.

He was particularly pleased with the inclusion of individuals from various regions and backgrounds, including a notable representation of women in leadership and operational roles.

However, he charged the organisation and others to ensure stronger auditing measures to prevent misuse of the platform, especially by fraudsters and criminal elements, tasking them to remain vigilant and proactive in addressing these challenges.

Earlier, the chief executive of Moniepoint, Mr Tosin Eniolorunda, thanked the federal government for its dedication to digital innovation and financial inclusion.

He emphasized Moniepoint’s commitment to Nigeria’s financial ecosystem, stating that the fintech giant has grown into Africa’s latest unicorn this year, a testament to its resilience and innovation.

“At Moniepoint, we are big believers in driving collaborations across the entire eco-system and this is premised on collaboration being the cornerstone of progress.

“Our engagement here underscores our intentionality to enhance government business relationships in a way that powers the dreams of millions of many more Nigerians.

“Together, we can unlock opportunities, transform lives, and build a more inclusive economy for all,” Mr Eniolorunda, who led the team comprising the Managing Director of Moniepoint Microfinance Bank, Mr Babatunde Olofin; the Vice President for Corporate Affairs at Moniepoint, Didi Uwemakpan; the SVP for Investor Relations and M&A, Ross Strike; the Head of Partnerships, Efemena Ogie; the Regional Manager for North West, Abdulmumin Tijjani; and the Partner at Lightrock Global, Ravi Sharma, said.