Banking
Access Bank Risks Negative Pressures After Merger—Moody’s
By Dipo Olowookere
Renowned rating agency, Moody’s Investors Service, has warned that Access Bank may experience negative pressures on its capital and asset risk metrics as a result of its merger with Diamond Bank Plc.
This disclosure was made in a statement issued recently, where it announced that it was placing the ratings of the Nigerian lender under review for downgrade.
Moody’s said it was looking to lower the B2 long-term local currency deposit rating of Access Bank as well as its B3 long-term foreign currency deposit rating, its b2 Baseline Credit Assessment (BCA) and Adjusted BCA, its B1 long-term Counterparty Risk Rating (CRR) and its B1(cr) long-term Counterparty Risk Assessment (CRA).
However, Moody’s said it was placing Diamond Bank Plc’s Caa1 long-term deposit ratings, its caa3 BCA and Adjusted BCA, its Caa1 CRR and its Caa1(cr) CRA on review for upgrade.
In late 2018, Diamond Bank and Access Bank announced their intentions to merge to become a big and formidable entity.
In its statements, Moody’s said it was reviewing the banks’ ratings following the approval of their announced merger by the Securities and Exchange Commission (SEC) on January 18, 2019, after a preliminary approval of the transaction by the Central Bank of Nigeria (CBN) in December 2018.
“Access Bank’s ratings are placed on review for downgrade to reflect the potential negative pressures on its capital and asset risk metrics as a result of the merger, while Diamond Bank’s review for upgrade reflects the expected convergence of its creditworthiness and ratings with those of Access Bank upon completion of the transaction,” the agency said.
Moody’s explained that its primary driver underpinning the decision to initiate a review for downgrade of Access Bank’s ratings is the expected weakening of the bank’s solvency profile, driven by a lower tangible common equity (TCE) ratio amid higher asset risks.
It noted that Access Bank will acquire a large balance sheet (about N1.6 trillion as of September 2018), mainly consisting of net loans (about N730 billion), which will increase its risk weighted assets, while Diamond Bank’s undercapitalization will likely strain Access Bank’s TCE.
Moody’s expects Access Bank’s post-merger TCE ratio will decline to around 10%, reducing the bank’s loss absorbance buffers. The TCE would also decline below the median for global peers with b2 BCA.
In addition, the rating agency expects Access Bank’s asset risk to increase because of the additional risk assets it will acquire from Diamond Bank.
The rating agency views Diamond Bank’s risk management and underwriting procedures as weaker than those of Access Bank and therefore expects a higher formation of nonperforming loans (NPLs) from Diamond Bank’s loan book that Access Bank will acquire. The rating agency also expects substantial operational risks to be introduced by this sizeable acquisition.
For Diamond Bank, the review for upgrade is driven by the fact that upon completion of the merger, Diamond Bank’s assets, liabilities and undertakings will be assumed by Access Bank, a stronger entity, who will become the obligor of former Diamond Bank’s creditors.
The review on both banks will conclude upon the legal completion of the merger and will take stock of any new relevant information that might be available at that time.
For Access Bank, the rating agency says that the review for downgrade will focus on (1) the impact of a successful completion of the merger on Access Bank’s solvency ratios (asset risk and capital metrics), (2) the extent to which the merger will improve Access Bank’s profitability and funding and liquidity profiles, and (3) any integration challenges that will arise from onboarding Diamond Bank’s assets and liabilities and staff.
The review will assess how Access Bank will implement measures to increase its capital buffers to enable it to absorb new credit losses that will come from Diamond Bank’s loan book. The rating agency will assess any plans by Access Bank to reduce its risk assets and improve its capital upon completion of the merger.
The review will consider the impact of Diamond Bank’s loan book on Access Bank’s asset quality, including the amount of NPLs that Access Bank will inherit from Diamond Bank, and the level of provisions of the NPLs, although management indicated that a large portion of Diamond Bank’s current NPLs will be written off before conclusion of the transaction.
Moody’s said it will also assess the positive impact of Diamond Bank’s largely retail deposit book to Access Bank’s deposit structure and tenor.
As of September 2018, Access Bank would acquire N1.1 trillion customer deposits from Diamond Bank, providing it with deposits that are cheaper than its current cost of funding. The rating agency will consider the impact of possible revenue enhancements and any long-term cost savings, viewed against short-term restructuring costs.
The review will also take into consideration material implementation challenges associated with the acquisition of a large bank such as Diamond Bank.
As of September 2018, Diamond Bank’s total assets constituted 34% of Access Bank’s assets and Moody’s estimates that Diamond Bank’s total assets will contribute about 23% of merged entity total assets.
Access Bank will need to successfully integrate its newly acquired staff and IT and processing platforms while ensuring that the business does not suffer during the integration period. Moody’s recognizes Access Bank’s good track record in mergers and acquisitions.
Moody’s said the review for upgrade on Diamond Bank’s deposit ratings reflects the prospects that the rated deposits and liabilities of Diamond Bank will benefit from Access Bank’s stronger risk profile, and the rating agency will align Diamond Bank’s long-term deposit ratings with those of Access Bank. These are currently B2 on review for downgrade for local currency, and B3 on review for downgrade for foreign currency.
The rating agency will assess the extent to which Diamond Bank’s current solvency weaknesses that are a result of its high NPLs, low provisions and low capital will be addressed by the merger.
The rating agency will also consider the implication of the merger to Diamond Bank’s foreign currency liquidity, in light of the significant refinancing needs in the first half of 2019.
Moody’s said it will withdraw Diamond Bank’s ratings upon completion of the merger because Diamond Bank will cease to exist as a separate legal entity.
By Modupe Gbadeyanka
About N2 billion is expected to be used to finance renewable energy products for customers by the end of 2026 in an effort to accelerate Nigeria’s clean energy transition.
To meet this goal, Sterling Bank is launching Sterling Solar Financing Hubs inside StarTimes retail outlets to embed on-the-spot solar financing at the point of purchase.
From the N2 billion earmarked for this initiative, N600 million has already been used up.
Under this programme, customers can now walk into participating outlets, select their preferred solar solution, receive financial guidance from dedicated Sterling Solar Financing Advisors, and begin the financing process immediately, subject to the bank’s credit assessment.
The first phase of the rollout commenced this July with five Solar Financing Hubs across Lagos, located in Lekki, Ikeja, Festac, Surulere, and Victoria Island.
The network will expand rapidly to 46 StarTimes outlets nationwide before the end of the third quarter of 2026, with a view to extending the model to more than 200 StarTimes locations nationwide.
Both parties have promised to continue working together to democratise access to clean energy financing, empowering more Nigerians to solarise their homes and businesses while contributing to a greener future.
“Sterling exists to enrich lives, and we believe that access to clean, reliable energy should be within everyone’s reach. Through this partnership with StarTimes, we are democratising access to solar by bringing financing directly to the point of need, enabling more families and businesses to transition to sustainable energy without the burden of prohibitive upfront costs. This is about unlocking opportunity, improving livelihoods, and powering Nigeria’s future,” the Divisional Head of Renewable Energy and Mobility at Sterling Bank, Mr Darlington Nwankwo, said.
Also commenting, the Vice President of StarTimes Nigeria, Mr Eric Xiao, said, “With the rollout of the Sterling Solar Financing Hubs, we are doing more than just selling solar products; we are building a sustainable energy ecosystem. By integrating StarTimes’ extensive service network with Sterling Bank’s professional financial services, we are significantly lowering the barrier for Nigerian households and small businesses to access clean energy.
“Moving forward, we will continue to deepen this partnership, ensuring that more Nigerians can enjoy reliable, affordable, and smart energy solutions, ultimately turning our vision of energy accessibility into a reality for all.”
By Modupe Gbadeyanka
The Nigeria Business Summit Regional Tour of Stanbic IBTC Bank made a detour to Jogor Centre, Ibadan, Oyo State, on Wednesday, July 15, 2026, to empower Micro, Small, and Medium Enterprises (MSMEs).
The event brought together business leaders, development partners and government representatives to discuss pathways for sustainable enterprise development across the South-West.
Participants engaged in practical masterclasses on export opportunities; access to finance and business growth strategies; gaining actionable insights into market expansion; trade documentation; credit readiness; financial record-keeping; and structured financing solutions designed to support long-term business success.
The Head of Enterprise Banking at Stanbic IBTC Bank, Ms Olajumoke Bello, informed participants that the programme is part of the lender’s commitments to supporting MSMEs through practical business education, strategic partnerships and improved access to growth opportunities.
The Executive Director of Business and Commercial Banking at Stanbic IBTC Bank, Mr Remy Osuagwu, on his part, said, “Our ambition is to be more than a financial institution to Nigerian businesses. We want to be a trusted growth partner, providing the financing, business insights and advisory support entrepreneurs need to build sustainable enterprises and unlock new opportunities.”
Similarly, the chief executive of Stanbic IBTC Bank, Mr Wole Adeniyi, who reinforced the company’s commitment to enterprise development, highlighted the importance of providing businesses with the right support structures to enable sustainable growth and long-term competitiveness.
“At Stanbic IBTC, we believe that sustainable economic growth depends on the success of small and growing businesses. That is why we are focused on providing access to finance, practical advisory support and the connections businesses need to move from ambition to scale,” he stated.
The Oyo State Commissioner for Investment, Trade, Cooperatives, and Industry, Professor Soliu Adelabu, said the initiative was designed to support businesses and strengthen the state’s entrepreneurship ecosystem, praising the bank for its support for traders, entrepreneurs, and artisans in the state.
The Permanent Secretary in the Oyo State Ministry of Women Affairs and Social Inclusion, Mrs O.M. Shotonwa-Roagess, highlighted the importance of strategic partnerships in expanding economic opportunities for women and vulnerable groups across Oyo State. She noted that the ministry remains open to collaborating with organisations such as Stanbic IBTC, development partners and the private sector to drive financial inclusion, entrepreneurship and sustainable economic empowerment.
The Nigeria Business Summit Regional Tour forms part of Stanbic IBTC’s broader commitment to empowering entrepreneurs through capacity building, financial inclusion and strategic business support, helping enterprises unlock new opportunities for growth and long-term success.
The Ibadan leg built on the momentum of previous tour stops in Katsina and Aba.
By Adedapo Adesanya
The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, says Nigeria anticipates remittances from citizens living abroad to increase by two-thirds in 2026 as it seeks to bolster its foreign-exchange reserves to $1 billion monthly.
“We are expecting that by the end of the year, we will hit about a billion Dollars a month from diaspora remittances,” he said at the 14th Annual BusinessDay CEO Forum in Lagos on Thursday, themed From Stability to Shared Prosperity.
Mr Cardoso said remittances are expected to be boosted from more than $600 million currently, banking on the CBN’s deliberate target at remittances to diversify reserve sources beyond oil earnings.
According to him, the apex bank engaged Nigerians abroad, banks and international partners to identify barriers to official remittance flows.
He said the lender subsequently reviewed policies to ensure easier movement of funds into and out of the country.
Mr Cardoso described the approach as providing free entry and free exit for foreign exchange.
He said the reforms helped double diaspora inflows within one year and exceeded initial expectations, also projecting annual remittances could reach about $8 billion if the current momentum was sustained, adding that the development reflected growing confidence in Nigeria’s financial system and foreign exchange market.
Mr Cardoso said reforms introduced by the apex bank had restored stability in the foreign exchange market and improved investors’ confidence.
He identified exchange rate unification as one of the central bank’s major achievements under the reforms programme.
According to him, replacing multiple exchange rate windows with a market-driven system eliminated distortions and improved transparency.
Mr Cardoso said improved foreign exchange liquidity and stronger reserves were among the gains from the reforms.
He said Nigeria’s net external reserves had risen from about $3 billion at the start of the reforms to above $40 billion currently, noting that gross external reserves had grown to about $52 billion, representing about 10 months of import cover.
According to him, the reserves are designed to shield the economy from external shocks and excessive market volatility.
He said the reserves were not meant for routine interventions or day-to-day exchange rate management.
