Banking
Merger: Fitch Places Diamond Bank, Access Bank on Rating Watch
By Dipo Olowookere
Following the announcement of a proposed merger between Diamond Bank and Access Bank, renowned rating agency, Fitch Ratings, has placed both Nigerian lenders on its rating watch.
In a statement issued by Fitch, it said Diamond Bank’s Long-Term Issuer Default Rating (IDR) has now been downgraded to ‘CC’ from ‘CCC’ and Viability Rating (VR) to ‘cc’ from ‘ccc’ and placed its IDRs and VR on Rating Watch Evolving (RWE).
The agency also simultaneously placed Access Bank Plc on Rating Watch Negative (RWN).
It explained that the downgrade of Diamond Bank’s ratings reflects the deterioration in the bank’s foreign-currency (FC) liquidity position since the last review and an expected deterioration in the bank’s capital position following additional loan impairment charges (LICs) on the announced write-offs of stage 3 loans under IFRS 9, to take place by year-end.
Fitch noted that the Rating Watches (RW) follows a memorandum of agreement between the banks to merge. The merger is expected to be completed by end-June 2019. Although the agreement is subject to regulatory and shareholder approval, Fitch said it believes that the probability of the completion of the merger is sufficiently high to take rating action.
The RWE on Diamond Bank reflects Fitch’s view that its standalone creditworthiness could improve or deteriorate beyond the current ratings, depending on the realisation of the merger and the bank’s ability to meet its upcoming FC obligations prior to it.
The upside aspect of the RWE reflects the view that should Diamond Bank meet its near-term obligations and the merger be completed, it is likely to be positive for the bank’s creditors due to the stronger franchise and financial metrics of the combined entity.
Following completion of the merger, Diamond Bank will cease to exist as a separate legal entity, and Fitch will then withdraw its ratings.
However, the downside aspect of the RWE reflects significant risk with regards to the bank’s near-term FC liquidity position given its large short-term bullet repayments, including a $200 million Eurobond maturing in May 2019, $100 million from Afrexim due in March 2019, and $70 million from the International Finance Corporation due in July 2019.
Fitch said it also understands that some large long-term obligations have recently become current suggesting intensified liquidity pressure.
According to Diamond Bank’s FC liquidity plan, the bank should be able to meet its obligations using existing US dollar liquidity, proceeds from the sale of its UK subsidiary, cash flows from maturing US dollar loans (mainly from oil and gas loans), and by exchanging naira into US dollars through the interbank market.
However, the plan is based on a number of assumptions, including the completion of the sale of the UK subsidiary, which has not yet been approved by the Prudential Regulation Authority in the UK, and therefore liquidity remains tight and highly vulnerable.
Fitch said it also understands that Access Bank may provide some liquidity support to Diamond Bank, although it will not assume a direct liability for Diamond Bank’s debt payments pre-merger.
Fitch point out that Access Bank withdrawing from the deal would most likely be negative for Diamond Bank.
It said the RWN on Access Bank’s Long-Term IDR of ‘B’ and VR reflects the potentially negative impact on its financial metrics from the absorption of a weaker bank and execution risks post-merger.
Upon completion of the merger Fitch will assess the bank’s credit profile. A potential downgrade is likely to be limited to one notch. However, it is also possible that Access Bank’s ratings could be affirmed with a Stable Outlook if the impact from merger appears to be more moderate, given the bank’s currently sound financial metrics and the planned capital raising, and provided there are no additional unforeseen risks emerging from Diamond.
Diamond Bank’s stage 3 loans stood at 37 percent of gross loans at end-1H18. Additionally, the bank’s stage 2 loans stood at 23 percent of gross loans at end-1H18, indicating the extent of its weak asset quality.
Access Bank has better asset quality with stage 3 loans and stage 2 loans accounting for 5 percent and 14 percent of gross loans, respectively, at end-1H18.
Diamond Bank plans to take LICs of between N150 billion-N180 billion before writing off bad loans by end-2018. Diamond Bank’s total equity was N222 billion at end-9M18, meaning that its capital position at end-December 2018 following the write-offs will be materially weaker.
For regulatory capital calculations, Fitch said it understands that as per the central bank’s IFRS 9 transition guidelines, Diamond Bank will be able to phase-in the impact of additional LICs on its total capital adequacy ratio (CAR) over a four-year period, allowing it to remain above its 10 percent minimum regulatory requirement.
Access Bank estimates that its CAR should stand at around 20 percent (above its minimum regulatory capital requirement of 15 percent) post-merger, which will be helped by the expected $250 million Tier 2 capital issuance in January 2019 and strong retained earnings.
Fitch explained that the banks’ National Ratings reflect their creditworthiness relative to Nigeria’s best credit and relative to peers operating in the country. Diamond Bank’s National Long- and Short-Term Ratings have been downgraded to ‘CCC’ and ‘C’, respectively, from ‘B’ and ‘B’, reflecting its weaker credit profile relative to peers, it said.
It noted that Diamond Bank’s National Ratings have also been placed on RWE based on expectation that its assets and liabilities will be transferred to Access Bank’s balance sheet, but also that its credit profile may deteriorate further relative to peers’ in the interim, adding that the RWN on Access Bank’s National Ratings indicates potential downside risks of the merger.
Fitch said Diamond Bank’s senior unsecured debt rating has been downgraded to ‘CC’/’RR4’ from ‘CCC’/’RR4’, with the lender’s senior unsecured debt rating also placed on RWE, reflecting that on its Long-Term IDR. It stated that the Long-Term Ratings on Access Bank’s senior unsecured and subordinated debt have been placed on RWN, reflecting that on its Long-Term IDR.
By Modupe Gbadeyanka
Providus Bank has dismissed insinuations that it failed to meet the new minimum capital requirements of the Central Bank of Nigeria (CBN).
The banking sector regulators gave financial institutions in the country a deadline of March 31, 2026, to shore up their capital base.
Before the deadline, there were speculations that Providus Bank, which plans a merger with Unity Bank Plc, would miss out because the deal had not concluded.
Unity Bank had to inform the public that it was only waiting for court authorisation to complete the merger, which may happen before March 31.
The Chief Financial Officer of Providus Bank, Mr Deoye Ojuroye, speaking at the opening of a new branch of the company in Ekiti State, reaffirmed the capital strength of the financial institution.
He emphasised that Providus Bank remains on a strong footing, with a disciplined approach to capital and risk management underpinning its growth.
“We are well capitalised within our regulatory category, and that gives us the confidence to continue expanding responsibly while supporting businesses and communities,” he stated at the commissioning of the new branch in Ado-Ekiti, the state capital.
The new branch marked another step in the steady expansion of the organisation across key growth markets in Nigeria.
The next item on the lender’s agenda is expanding its footprint to support local enterprise, deepen financial inclusion, and bring banking services closer to individuals and businesses nationwide over the next 12 months.
“Our approach is deliberate—we are growing in the right places, supporting real economic activity, and building a bank that is both resilient and responsive to the needs of our customers,” Mr Ojuroye stated.
According to him, the bank plans to open additional branches in strategic locations over the coming year, reinforcing its commitment to scale, accessibility, and long-term value creation, and positioning itself as a reliable partner to businesses and individuals, combining financial strength with a clear focus on sustainable growth.
By Aduragbemi Omiyale
A Côte d’Ivoire subsidiary of Zenith Bank Plc will be launched on Wednesday, April 29, 2026, after obtaining an operating licence in December 2025 from the country’s Ministry of Finance and Budget.
The country’s subsidiary will operate from its headquarters at SCI Wall Street, Avenue Noguès, Plateau, Abidjan.
Zenith Bank is in Côte d’Ivoire to deepen its presence in Francophone West Africa and strengthen financial intermediation within the West African Economic and Monetary Union (WAEMU).
Positioned as a gateway for cross-border trade and investment, Zenith Bank Côte d’Ivoire will focus on corporate banking, trade finance, local and offshore banking services, and structured financial solutions tailored to businesses operating across Africa and internationally.
Expected at the official opening ceremony tomorrow are senior government officials and regulators from Nigeria and Côte d’Ivoire, continental business leaders, and members of the diplomatic community, highlighting the strategic economic ties and investment opportunities between the two markets.
The Côte d’Ivoire launch forms part of Zenith Bank’s broader continental growth strategy. In addition to the Anglophone countries where it currently operates, and in line with the expansion into the Francophone market, the bank has commenced its entry process into the CEMAC (Central African Economic and Monetary Community) region, with Cameroon as the focal point.
It was gathered that the new subsidiary will be headed by Mr Cédric Tano, a seasoned banking executive with over two decades of experience.
“We are proud to establish Zenith Bank’s presence in Côte d’Ivoire at a time of strong economic growth in the country and increasing regional integration.
“Our focus is to showcase the Zenith brand as a customer-centric institution that combines global best practices with deep local insight.
“We are well-positioned to support businesses with innovative financing solutions, facilitate cross-border trade, and contribute meaningfully to the growth of the Ivorian economy and the wider WAEMU region,” Mr Tano commented.
Also speaking, the chief executive of Zenith Bank, Ms Adaora Umeoji, said, “From the very beginning, our founder and chairman, Mr Jim Ovia, set out to build a truly global brand with a strong presence across Africa and key international markets.
“The launch of Zenith Bank Côte d’Ivoire is a bold step in realising that vision; opening a strategic corridor into Francophone West Africa and reinforcing our commitment to facilitating trade, investment, and enterprise growth across the continent.
“As we continue to expand thoughtfully and strategically, we remain focused on delivering world-class banking solutions that connect African businesses to global opportunities.”
By Modupe Gbadeyanka
Some entrepreneurs across diverse sectors recently completed a three‑week intensive capacity‑building programme organised by Ecobank Nigeria, in partnership with DHL.
The event was put together to equip Small and Medium Enterprises (SMEs) with the skills, tools, and insights required to scale beyond local markets and compete globally.
The focus was on critical growth enablers such as cross‑border trade, e‑commerce opportunities, logistics, customs procedures, and international shipping—key pillars for sustainable expansion in today’s increasingly connected global marketplace.
In one of the sessions, titled Trade and Grow Beyond Borders: Welcome to E‑commerce, the Relationship Channel Manager for DHL Customers/Global Express, Mr Charles Eke, underscored logistics as a critical success factor for SMEs, identifying key challenges such as access to finance, markets, and efficient logistics.
He also provided practical guidance on customs processes, international shipping, documentation, and shipment tracking, while emphasising the immense opportunities e‑commerce presents for cross‑border expansion.
According to him, international markets often offer greater growth potential than domestic markets for well‑positioned SMEs.
The Head of SMEs, Partnerships and Collaborations at Ecobank Nigeria, Mrs Omoboye Odu, described the programme as a catalyst for meaningful growth and mindset change.
“Over the past three weeks, something truly powerful has taken place. This programme has gone far beyond knowledge sharing—it has inspired new thinking and unlocked fresh possibilities for our SMEs. The message is clear: no business should be limited by geography,” she said.
Mrs Odu reiterated Ecobank’s deliberate focus on SMEs as key drivers of Africa’s economic development, saying, “Beyond building capacity, we are intentionally opening doors by connecting businesses to new markets and opportunities. With our presence in over 30 African countries, coupled with integrated payment, trade finance, and e‑commerce solutions, Ecobank is uniquely positioned as the Pan‑African bank enabling seamless cross‑border trade.”
One of the participants, Ms Dolapo Fatoki of Debsfray, a Lagos-based fashion brand, described the initiative as impactful, practical, and transformative.
“The sessions were highly informative. I gained a deeper understanding of documentation and pricing, two areas that previously posed major challenges for me. The collaboration between DHL and Ecobank has been exceptional and truly beneficial,” she noted.
Similarly, the Creative Director of FC Accessories, Mr Tosin Olukuade, described the programme as “an eye‑opener,” adding that it reshaped his approach to business growth.
“The insights I gained will help me scale my business exponentially. I am grateful to Ecobank and DHL for creating this opportunity,” he said.
Reflecting on the programme’s digital focus, the chief executive of Needle Point, Mrs Theresa Onwuka, highlighted how the sessions broadened her outlook on growth and innovation.
“The class was so good—it got my mind thinking of possibilities. My main takeaway is clear: digitalisation is the way forward,” she remarked.
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