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 Aduragbemi Omiyale
The sum of N427.96 million has been disbursed to more than 1,000 enrollees as surplus by Noor Takaful Insurance Limited and Noor Health Limited.
The payment of surplus is a demonstration of gratitude, accountability, reflection, and celebration of promises made and kept.
At the 2024 Surplus Distribution and Claims Celebration Ceremony in Lagos on Tuesday, August 11, 2026, a total of 22 participants were given surplus payments by Noor Takaful, while 2 enrollees received surplus payments from Noor Health.
Some of the participants that received surplus payments included Jaiz Bank, Lotus Bank, Sterling Bank, The Alternative Bank, Payvantage Limited, Integrated Indigo Limited, Smadac Securities, and Taxaide Logistics.
At the event themed Promise Kept: Celebrating Takaful’s Commitment to Shared Reward, the chairman of Noor Takaful Insurance Limited, Ambassador Shuaibu Ahmed, explained that the company has proven over the years that surplus distribution is not a theoretical concept but a model that works in practice, as evidenced by its consistent payments to participants. He acknowledged that there is growing acceptance of Takaful, as it is increasingly recognised as a credible and established alternative to conventional insurance.
“At Noor, however, we believe it is more than just an alternative. We believe it is a better alternative. We say this because Takaful is built around values that are fundamental to how financial protection should work: equity, fairness, mutual responsibility, transparency, and shared benefit,” he said.
Also speaking at the event, the Vice Chairman of Noor Takaful Insurance Limited, Mr Aminu Tukur, stated that the 2024 surplus distribution was based on the performance of the participants’ risk pool after claims and other obligations had been settled.
Mr Tukur disclosed that the company had grown from a humble beginning of about 60 participants at its inception to approximately 4,000, noting that the company will continue to collaborate with regulators and other stakeholders to promote Takaful and deepen insurance awareness across Nigeria. He added that the company will mark 10 years of operations in 2027.
He explained further that since inception, the company has cumulatively paid N22 billion in claims to beneficiaries/participants, with General Takaful accounting for N7.4 billion and Family Takaful contributing N14.5 billion.
“Our role is to ensure proper management and administration of funds, which includes investments. Secondly, we have a responsibility to ensure that every genuine claim is paid on a timely and stress-free basis,” he stressed.
In his remarks, the chief executive of the National Insurance Commission (NAICOM), Mr Ayo Omosehin, who was represented by the Deputy Director, Insurance, Technical, NAICOM, Mr Usman Jankara, described the payment of surplus to participants as a practical demonstration of the values that define cooperation, shared responsibility, fairness, ethical conduct, and collective prosperity.
He stated that the distribution of surplus by Noor Takaful clearly demonstrates that participants are not merely purchasers of protection but contributors to a system built on cooperation and mutual benefit.
“This has sent a strong message that Takaful can create measurable value while remaining faithful to its ethical foundation,” he added.
Speaking on the recapitalisation exercise for insurance companies recently carried out by NAICOM, he stated that Takaful operators were exempted as they had undergone a similar exercise 4 years ago. According to him, there is no compelling need at the moment for recapitalisation of the Takaful segment of the insurance industry, as all the Takaful operators are well capitalised.
While commending the company for reaching the milestone and promoting participants’ education and engagement, he stressed that NAICOM would continue to support Takaful’s growth while ensuring proper regulatory oversight.
By Aduragbemi Omiyale
The transaction banking capabilities of Stanbic IBTC Bank have been improved with the upgrade of its software to FinnAxia® 9.0.
This was made possible through the collaboration between the financial institution and Nucleus Software, a leading provider of lending and transaction banking solutions.
The milestone reflects more than a decade of collaboration between both organisations in strengthening transaction banking capabilities and delivering enhanced value to corporate and institutional clients.
As customer expectations continue to evolve and businesses increasingly demand seamless, real-time and digitally enabled banking services, Stanbic IBTC Bank and Nucleus Software remain focused on leveraging technology to improve service delivery, enhance operational efficiency and support business growth.
The advancement to FinnAxia® 9.0 enhances Stanbic IBTC Bank’s transaction banking platform, strengthening its ability to deliver integrated payments, collections, liquidity management and cash management solutions.
The upgrade supports greater agility across operations, improves automation and connectivity, enhances digital experiences for customers, and provides a scalable foundation for future growth and innovation.
Across Africa, transaction banking is entering a new phase of transformation as businesses increasingly seek real-time payments, digital trade services, intelligent liquidity management and connected banking experiences.
Financial institutions are therefore investing in modern technology platforms that enable faster innovation while maintaining resilience, security and customer-centric service delivery.
The adoption of FinnAxia® 9.0 aligns with Stanbic IBTC Bank’s broader strategy of leveraging technology to create value for clients and maintain high standards of operational excellence.
“Our relationship with Nucleus Software has spanned a decade and forms part of our broader commitment to continuously strengthening the solutions and services we provide to clients.
“As transaction banking continues to evolve, we remain focused on investing in capabilities that help businesses operate with greater speed, visibility and confidence.
“The advancement to FinnAxia® 9.0 enhances our transaction banking platform and strengthens our ability to deliver innovative, efficient and customer-focused solutions in a rapidly changing environment,” the Executive Director of Corporate and Transaction Banking at Stanbic IBTC Bank, Mr Eric Fajemisin, stated.
Also speaking on the development, the Head of Transaction Banking at Stanbic IBTC Bank, Jesuseun Fatoyinbo, said, “Transaction banking today is about delivering intelligent, seamless and responsive experiences for customers. This enhancement further strengthens our ability to simplify customer journeys, improve operational efficiency and introduce new capabilities more rapidly. It reflects our continued commitment to supporting clients with solutions that evolve alongside their business needs and growth ambitions.”
Speaking on the milestone, the chief executive of Nucleus Software, Parag Bhise, said, “We value our long-standing relationship with Stanbic IBTC Bank and are pleased to support the Bank’s continued efforts to enhance its transaction banking capabilities.
“FinnAxia® 9.0 has been designed to help financial institutions respond to evolving customer expectations through improved automation, connectivity and operational efficiency.”
The advancement to FinnAxia® 9.0 represents the latest step in the ongoing collaboration between Stanbic IBTC Bank and Nucleus Software to strengthen transaction banking capabilities and deliver innovative solutions that support the evolving needs of businesses.
By combining Stanbic IBTC Bank’s customer-centric approach with Nucleus Software’s technology expertise, the partnership continues to drive greater efficiency, agility and value for corporate and institutional clients.
By Adedapo Adesanya
Standard Chartered has launched its ninth sub-fund under its Variable Capital Company (VCC) platform, partnering with Allianz Global Investors (AllianzGI) as the sub-manager to provide eligible clients with access to a gold-focused investment strategy.
The new Signature Select Enhanced Gold Income Fund combines exposure to gold with an enhanced income-generation strategy. The fund invests in gold exchange-traded funds (ETFs) and uses a covered call strategy to seek regular income while allowing investors to participate in the potential long-term appreciation of gold.
Standard Chartered said gold could help diversify investment portfolios because of its relatively low correlation with traditional asset classes and its potential to provide resilience during periods of geopolitical, monetary and market uncertainty.
The fund is available from this month to Accredited and Professional Investors across the Bank’s Priority, Priority Private and Private Banking segments in Hong Kong, Singapore, the United Arab Emirates, Jersey, Kenya and Nigeria. Taiwan is expected to be added later in 2026.
AllianzGI, which has more than 700 investment professionals globally as of March 31, 2026, will provide investment management expertise for the fund.
Its Global Multi Asset Team will be responsible for options selection and the day-to-day management of the portfolio, drawing on its experience in portfolio construction, derivatives implementation, risk management and multi-asset investing across different market cycles.
Mr Sumeet Bhambri, Global Head, Advisory and Managed Investments, Wealth Solutions, Standard Chartered, said the partnership with AllianzGI would strengthen the bank’s latest VCC fund and provide clients with a differentiated investment strategy.
“As clients seek greater diversification amid an increasingly uncertain market environment, the fund provides access to a differentiated strategy that combines gold’s portfolio diversification benefits with enhanced income potential,” Mr Bhambri said.
He added that the launch reflected Standard Chartered’s commitment to expanding its wealth platform through strategic partnerships and delivering innovative investment solutions to clients.
On his part, Mr Marc Gualandi, Head of Global Banks at Allianz Global Investors, said the fund was designed to give investors exposure to gold’s long-term value proposition while generating income through an active options strategy.
“We believe gold can play an important role as a long-term allocation within a well-diversified portfolio,” Mr Gualandi said.
He said AllianzGI would leverage its expertise in income strategies, portfolio construction and risk management to help investors pursue income and long-term portfolio resilience.
Standard Chartered established its VCC platform in June 2024 to combine the expertise of leading fund managers with its global asset-class specialists and provide clients with access to customised investment strategies.
The latest launch brings the total number of sub-funds on the platform to nine and marks Standard Chartered’s fourth fund launch in 2026.
