Banking

Diamond-Access Bank: A New Dawn for Investors, Shareholders

Published

6 years ago

19/02/2019

A sound and competent banking sector is essential for a stable macroeconomic environment; therefore, the importance of commercial banks in a country cannot be overemphasized.

This is because they occupy key positions in a country’s financial system and are essential agents that would lead to the growth of any economy.

They also provide the bulk of money supply as well as the primary means of facilitating the flow of credit and so it is submitted that the economic well-being of a nation is a function of advancement and development of her banking industry.

As a result, the banking sector in Africa especially Nigeria has improved significantly due to impact of globalization in terms of technology, regulations and structure.

In achieving enhancement of capacity to support growth in the real sector, there is ample evidence that the Central Bank of Nigeria (CBN) relied heavily on bank capital reforms in tackling problems of under-performance in the sector.

Implementation of these reforms has often led to strategies which include merger and acquisitions –the two common strategies adopted in the implementation of consolidation programmes.

According to Investopedia, Mergers and Acquisitions have been shown to promote synergy in business operations as the performance of the emerging organization is often better than the sum of individual performances prior to the consolidation.

Hence, the fusion of two or more banks into a unified entity is expected to promote operational performance through improved competition, exploitation of economies of scale, facilitation of adoption of advanced technologies and higher level of operational efficiency.

Ultimately, the goal is to strengthen the intermediation role of banks and to ensure that they are able to perform their traditional role of enhancing economic growth as well as increasing customer base alongside palatable product offerings.

This clearly influences the ongoing corporate marriage between Access Bank Plc and Diamond Bank Plc.

The deal which is expected to be completed in the first half of 2019, is set to birth over 29 million customers which is basically the largest customer base of any bank in the continent which might constitute about 600 branches, about 33,000 Point of Sale (POS) terminals as well as 13 million mobile customers.

Also, the two banks is set to have the largest alternative network channels even as both financial institutions can now use their combined total of 3,100 Automated Teller Machines (ATMs).

Following the signing of the Memorandum of Agreement and announcement of headline terms, which valued Diamond Bank at approximately N72.5 billion (about $200 million), will see Diamond Bank shareholders receive N3.13 per share in cash and shares. This means that Diamond Bank shareholders would receive a consideration of N3.13 per share, comprising N1 per share in cash and the allotment of two New Access Bank ordinary shares for every seven Diamond Bank ordinary shares held as at the Implementation Date.

Group Managing Director, Access Bank, Herbert Wigwe, noted that the combination of the two businesses will create the largest retail bank in Africa by customer base and a very significant player in the Nigerian market while adding that this represents a huge step towards the delivery of the bank’s goal to bring the power of banking to millions of people across Nigeria and an exciting transaction for Access Bank and Diamond Bank’s customers, staff and shareholders.

Corroborating him, Chief Executive Officer, Diamond Bank Plc, Uzoma Dozie, said that the merger is positive for all of Diamond Bank stakeholders, including customers, employees and shareholders adding that customers will benefit significantly through the unrivalled combination of the best of Diamond Bank’s retail and digital leadership with the size of Access Bank’s balance sheet, corporate names and geographical reach.

“Customers are at the heart of our decision to create one of Nigeria’s leading banks. The combination of Access Bank and Diamond Bank will result in real benefits. The products and services that Diamond Bank’s clients enjoy, including its commitment to digital innovation, will continue unchanged and will be backed by Access Bank’s own commitment to customers, financial inclusion and sustainability, and the bank’s corporate expertise and strong balance sheet.”, Dozie said.

With the deal in place, the investing community remains skeptical as they await the outcome of the merger even as customers of both banks are worried about longevity of product offerings afforded to them.

For instance, Former President, Noble Shareholders Association, Sir Timothy Adesiyan, said, “Instead of CBN throwing all our shares into the lagoon, at least we are going to have in exchange, Access bank shares and we appreciate it rather than having nothing”

National Chairman, Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie, called for calm amongst the investing community.

Okezie said, “If Diamond bank is operating 200 branches, considering the merger, Access bank will be a mega bank. I do not think there is any reason to panic as Access Bank is not new to the terrain, they know what they are doing and they must have done their homework to find out whether after the whole merger thing is done, they will still remain solid,

Also speaking, Head, Retail Banking, Diamond Bank Plc, Robert Giles while assuring Nigerians that the merger between Diamond and Access bank will bring the best of strong core print in treasury platform as well as the best of retail banking, noted that uique products such as Diamond Xtra, Xclusive Plus, High Interest Deposit Account (HIDA), Diamond Business Advantage (DBA) and Diamond Beta will remain even after the merger is completed.

Banking

Seven Innovators Share N145m at 2024 Wema Bank Hackaholics

Published

2 hours ago

29/11/2024

Modupe Gbadeyanka

By Modupe Gbadeyanka

About N145 million was won by seven innovators at the grand finale of the Hackaholics 5.0 organised by Wema Bank Plc in Lagos, with the overall winner of the contest, Feegor, going home with N50 million for its innovative B2B wholesale marketplace and SaaS platform.

Feegor empowers small businesses to discover, negotiate, and source goods from verified suppliers while accessing credit through a Buy Now Pay Later (BNPL) model.

The first runner-up, Empayment AI, got N35 million for its AI-powered invoice discounting platform, revolutionizing how businesses manage payments.

Bloom Beauty, the second runner-up, was awarded N20 million for its personalized, AI-curated solutions that are transforming the beauty industry.

In the women-led category, MyTherapist secured the position of first runner-up, earning N12 million. MyTherapist connects users with mental health professionals, providing accessible and affordable therapy solutions for emotional well-being.

Meanwhile, MyItura, an innovator delivering remote healthcare services, clinched the position of second runner-up in the women-led category, receiving N8 million.

Both Northino and University X earned honourable mentions at the grand finale, each receiving N10 million. Northino was recognized for bridging traditional knowledge and modern technology through digital skills training for African native speakers, while University X was impressed with its transparent, all-encompassing platform for tertiary education management.

“We are delighted to celebrate the brilliance of our youth through the Hackaholics initiative. At Wema Bank, we are more than a bank; we are enablers of dreams and drivers of transformation.

“When I stood here earlier, the total prize money was N75 million. But, inspired by the potential we saw, we decided to increase the total prize pool to N145 million.

“Wema Bank’s legacy of 79 years remains rooted in innovation, and with initiatives like Hackaholics, we continue to empower lives and shape the future,” the chief executive of the lender, Mr Moruf Oseni, stated.

Also, his counterpart at Feegor, Ugonna Ginigeme, said, “I feel very grateful to God, my team, and everyone who has been part of this journey. Winning among so many great startups and entrepreneurs is humbling.

“I sincerely thank the MD, Wema Bank, and its management for this incredible opportunity. These are still early days, but we are determined to keep working, building, and creating a positive impact for SMEs and the Nigerian economy while building an all-around successful company.”

Business Post gathered that this year’s Hackaholics stood out with a record-breaking 3,500 applications from across Nigeria. From this pool, 10 finalists showcased innovative solutions addressing real-world challenges, ranging from education accessibility to sustainable agriculture, healthcare, and more.

Banking

CBN, Fagbemi Express Fears Over Rising MDAs’ Judgement Debts

Published

2 hours ago

29/11/2024

Adedapo Adesanya

By Adedapo Adesanya

The Central Bank of Nigeria (CBN) has joined the Attorney General of the Federation (AGF) and Minister of Justice, Mr Lateef Fagbemi (SAN) to raise an alarm over increasing judgment debts against Ministries, Departments and Agencies (MDAs) of the federal government.

The parties expressed this concern while speaking in Abuja at the 2024 roundtable with legal advisers of MDAs.

The apex bank disclosed that in 2015, the number of cases stood at 441, adding that this has since increased exponentially in terms of volume to 1,629 and also in financial value since then.

Among major concerns was that the sporadic rise in judgment debts recovered through garnishee orders by the courts threatened the availability of funds for development in the country.

The Deputy Governor of the central bank for Corporate Services, Mr Bala Bello, traced the increase to the introduction of the Treasury Single Account (TSA) policy of the federal government in August 2015.

Mr Bala, who was represented by the Director for Legal Services at CBN, Mr Kofo Salam-Alada, said: “It is also pertinent to point out that prior to 2015 the number of cases stood at 441 and has since increased exponentially in terms of volume to 1629 and also in financial value, post-2015.

“Our inquisition on this development revealed that the upturn was a result of apathy by most MDAs towards adequately defending their cases in court, which in most cases will result in a judgement against the MDA”.

He stated that to address the issues, stakeholders must demonstrate a commitment towards the adoption of appropriate case management strategies and standardised practices across MDAs.

Mr Bala added that the purpose of the roundtable was to jointly come up with solutions to tackle the disturbing situation.

“We all know that our country Nigeria is faced with dwindling income and escalating expenditure. This also makes it imperative for us all to put on our thinking caps and participate actively in this session in order to safeguard the limited resources available to the country.

“The CBN remains committed to playing its role as banker and providing economic and financial advice to the federal government,” he added.

On his part, the AGF in his speech expressed happiness with the CBN, particularly the legal department of the bank for the initiative and collaborative efforts with the Federal Ministry of Justice to rescue government agencies from mountains of judgement debts.

“Let me reiterate that as legal advisors to the government, we play a pivotal role in shaping the legal landscape of our nation, safeguarding the state’s assets, avoidance of undue embarrassment to government, and ensuring the smooth functioning of public services.

“Our work touches every facet of public life, from reviewing and rendering appropriate and sound legal advice to defending the government’s interests in court. It is important to note that the quality of our work directly impacts the effectiveness and legitimacy of government actions.

Mr Fagbemi, who spoke through the Solicitor General of the Federation and Permanent Secretary, Federal Ministry of Justice, Mrs Beatrice Jedy-Agba, stressed the importance of providing exceptional legal services by approaching each case with diligence, professionalism, high ethics, integrity, and commitment to upholding public policy.

“Let me use this opportunity to state that the government will no longer condone instances of liability arising from compromises, lack of diligent prosecution/defence of cases, or sheer incompetence exhibited by attorneys acting on behalf of the government.

“While we will take measures to recognise and reward diligence, we will not hesitate to apply appropriate sanctions to officers who have failed to live up to the ethics of both the profession and the public service”, he added.

Banking

Zenith Bank Expands Global Footprint With New Branch in Paris

Published

7 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.”