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Tag: Access Bank

  • Investors scramble for Access Bank, Diamond Bank as merger draws near

    Access Bank Plc and Diamond Bank Plc are the two most-sought-after stocks in the Nigerian stock market as investors scramble to meet the closing date for the merger between the two commercial banks.

    Access Bank and Diamond Bank accounted for more than one-quarter of total turnover at the Nigerian equities market last week. The two commercial banks emerged the two most active stocks at the Nigerian Stock Exchange (NSE) with a turnover of 832.55 million shares valued at N3.26 billion shares in 2,569 deals, representing 29.4 per cent of the total turnover at the equities market.

    Diamond Bank, which was believed to have more valuation premium, was the most active stock with a turnover of 548.21 million shares valued at N1.32 billion in 713 deals. Access Bank, the post-merger entity, followed with a turnover of 284.34 million shares worth N1.94 billion in 1,856 deals. Total turnover at the NSE stood at 2.83 billion shares worth N28.14 billion in 28,739 deals.

    Both Access Bank and Diamond Bank had fixed tomorrow, Tuesday February 19, 2019 as the deadline for determining shareholders that will attend the crucial court-ordered meeting scheduled for March 5, 2019.

    At the March 5, 2019 meeting, shareholders are expected to consider and approve the scheme of merger for the combination of the two banks. The approval of the scheme by the shareholders is the final major hurdle in a series of approvals needed to consummate the merger.

    The Central Bank of Nigeria (CBN) and Securities and Exchange Commission (SEC) had earlier approved the scheme. Both CBN and SEC granted “Approval-in-Principle” to the proposed scheme of merger after consideration of reports by parties to the transaction, leaving the decision to accept or reject the proposals to owners of the banks

    The regulatory approvals had allowed the bank to proceed to the next stages of the business combination including obtaining an order of a Federal High Court to convene an extraordinary general meeting of shareholders for consideration of the proposed scheme, holding the court-ordered meeting of shareholders by each bank and the presentation of the approved scheme of merger to the Federal High Court for its sanction among others.

    The Memorandum of Agreement and announcement of headline terms announced earlier by the banks had valued Diamond Bank at approximately NGN72.5 billion, about $200 million. The business combination will see Diamond Bank shareholders receiving N3.13 per share in cash and shares. Diamond Bank shareholders will receive a consideration comprising of N1.00 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.

    The business combination is expected to form a leading Tier 1 Nigerian bank and the largest bank in Africa by number of customers, spanning three continents, 12 countries and 29 million clients. Access Bank will be the post-merger entity while its Managing Director, Herbert Wigwe will continue to lead the post-merger management as chief executive.

    Access Bank plans to leverage the best talent of both banks and combine them to create a leading banking franchise in Nigeria. However, while the post-merger entity will retain the Access Bank name, it is intended that the brand will be redesigned to include strong elements of Diamond Bank’s digital and retail brand.

    According to the banks, cost synergies conservatively estimated at N30 billion per annum, pre-tax, will be fully realised within three years post-completion while further revenue and balance sheet synergies will be evaluated by joint implementation committee.

    The two banks outlined the competitive advantages of the merger. Diamond Bank will benefit from Access Bank’s strong culture of risk and capital management expertise and a clear strategy for sustainable growth. Access Bank will take advantage of Diamond Bank’s unparalleled retail banking expertise and strong digital offering. Together, the two companies would create one of Nigeria’s leading banks, with 29 million customers, including more than 13 million mobile customers, as well as 3,100 ATMs and around 32,000 PoS terminals.

    Diamond Bank and Access Bank share many of the same areas of focus, including women, youth, entrepreneurs and the financially excluded and will be able to further develop their positioning and market leadership in these growth sectors. Diamond Bank’s corporate customers will also be able to benefit directly from Access Bank’s corporate expertise in trade finance, cash management, treasury and corporate finance.

    Diamond Bank currently has 19 million customers, including 10 million mobile users. The combined operation will have relationships with both MTN and Airtel, ensuring that customers of the merged bank will continue to access a strong mobile banking proposition. Access Bank and Diamond Bank also operate from the same technology platform, which the Boards believe will enable them to complete the integration with minimal disruption or impact on customers, in addition to generating significant synergies.

  • Access Bank empowers students with IT-skills via Activate

    The Information Technology (IT) Unit of Access Bank Plc yesterday  empowered students from Lagos schools with Information Technology(IT) skills.    The programme tagged: Activate allows the lender, in partnership with Microsoft Nigeria and other  IT firms, to train students from 24 Lagos schools IT skills. The project is part of the IT Department of the bank’s Corporate Social Responsibility (CSR) project 2018/ 2019.

    The last part of the scheme, held at the bank’s headquarters in Lagos, involved quiz competition on IT organised by the bank for the students.

    At the end of the exercise, Lagos Progressive Senior Secondary School scored 55 points to emerge winner of the 2018/2019 Activate programme.

    Speaking on the CSR initiative, Head, IT Governance, Architecture and Planning at Access Bank Plc, Tayo Soladoye, said the project is the CSR initiative of the IT Unit of Access Bank for the 2018/2019.

    “At Access Bank, we believe we exist in an ecosystem and we need to give back to the society where we operate. All departments in the bank, will chose one project in a year to give back to the society.  The IT unit of the bank has the tradition to chose a project they need to execute to give back to the society. The bank carries out its own CSR initiative, but this is being carried out by the IT Unit of the bank, through contributions by its staff,” he said.

    “Giving back to the society is in our Deoxyribonucleic Acid (DNA) both as an organization and as staff of the bank.  We tagged this program, Activate. We recognise the importance of role information technology plays in our lives. The way we think, live, work and interact. We have also seen that the trend in IT is not going to change significantly, and therefore we need to sensitise the next generation of Nigerians to come in and sustain the tempo”.

    Soladoye explained that in other parts of the world, people have done amazing things using IT, and even in banking IT has helped to lift the sector. He said there is need to raise that generation that takes banking beyond where it is today. “We need to Activate that Next Generation and that is what this program is all about”.

    Also speaking, Intelligent Cloud, Business Lead, Middle East Africa- Emerging Markets, Wale Olokodana, explained that Information Technology (IT) and communication is doing a programme they call activate. They are empowering the students to gain more computer skills.

    He said the students spent a lot of time learning and now they are testing their knowledge. We are just here to support and motivate the students and give them something to aspire to. I also shared my experiences with them from the Microsoft perspective as well as someone who is also local to Nigeria.

    “Access Bank is working with the students to ensure they have the right skills. We are supporting and validating, and making sure they get the best. It is very important that people have the right foundation and encouraging them to learn about computing.

    For them to learn what makes computing what it is today is very critical. They need to have the leaning required in today’s world,” he said.

  • Access Bank cancels meeting on new capital raising

    The board of directors of Access Bank Plc yesterday cancelled an extraordinary general meeting of shareholders of the bank called to seek shareholders’ consideration for new capital raising.

    The bank did not provide reasons for the cancellation of the previously scheduled February 1, 2019 meeting. Market sources said the cancellation might not be unconnected with the need for clarity and streamlining of key considerations in the ongoing business combination between Access Bank and Diamond Bank Plc.

    “We regret any inconvenience that this cancellation may cause our shareholders,” Access Bank stated in a terse notice of cancellation.

    Directors of Access Bank had late December 2018 called for an extraordinary general meeting of shareholders to approve new equity issue. Access Bank planned to raise N75 billion from existing shareholders through a rights issue.

    At the meeting, shareholders of Access Bank were expected to consider increase in the authorised share capital of the bank from N20 billion to N35 billion, thus increasing the shares from 38.0 billion ordinary shares of 50 Kobo each and 2.0 billion preference shares of 50 Kobo each to 68 billion ordinary shares of 50 kobo each and 2.0 billion preference shares of 50 kobo each through the creation of 30 billion ordinary shares of 50 kobo each.

    The cancelled meeting was also expected to authorise the directors of Access Bank to raise additional equity capital of up to a maximum of N75 billion by way of a rights issue in the ratio, on such terms and conditions and on such dates as may be determined by the board.

    Under the proposals for the meeting, if the rights issue is undertaken prior to the implementation date of the merger between Access Bank and Diamond Bank, the rights issue will also include a provision that allows Access Bank to issue shares to shareholders of Diamond Bank, under the same terms.

     

  • Access Bank eyes N15b Green Bond

    Access Bank Plc, which could create plans to sell the country’s first corporate green bond to fund environmental projects.

    According to Bloomberg report, the bank plans to raise about N15 billion ($41 million) in the first quarter for climate-related funds and programs, the person said, asking not to be identified because the talks are private. Access Bank spokesman Amaechi Okobi said he couldn’t immediately comment when contacted by phone.

    The West African nation’s government sold the country’s first green bond worth 10.7 billion naira in 2017 and plans to raise as much as N150 billion by 2021, according to the debt management agency. A green bond is a bond specifically earmarked to be used for climate and environmental projects.

    Nigeria is Africa’s biggest oil producer and green bonds are part of the country’s plan to cut emissions and meet its obligations to the Paris agreement on the environment. The Securities Exchange Commission and Lagos-based FMDQ OTC Securities Exchange launched Nigerian Green Bond Market Development Program last year to encourage private companies to sell climate-related debts.

     

  • CBN okays Access, Diamond merger

    THE Central Bank of Nigeria (CBN) has given a “No Objection” nod to the merger plans of Access Bank Plc and Diamond Bank Plc, the boards of both banks said yesterday.

    The deal is expected to be completed in the first half of 2019. Transaction completion is subject to Access Bank and Diamond Bank obtaining shareholder and regulatory approvals (CBN, the Securities and Exchange Commission (SEC), the Federal High Court (FHC) and the National Pension Commission (PenCom).

    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) and will see Diamond Bank shareholders receive N3.13 per share in cash and shares, Access Bank and Diamond Bank are announcing further details, including the rationale and benefits of the deal, the estimated cost synergies, the capital management plan and the timetable.

    The merger will form a leading Tier 1 Nigerian bank and the largest bank in Africa by number of customers, spanning three continents, 12 countries and 29 million clients.

    It will bring also together treasury, risk management and corporate banking expertise with strong retail and digital banking capabilities to create a financial institution operating across the full suite of products for all customer segments.

    The transaction will be concluded via Scheme of Merger following Access Bank and Diamond Bank Court Ordered Meetings billed for March 2019 to approve terms. Subject to shareholder approvals, final approvals by SEC, CBN and PenCom regulatory and FHC sanction are expected before the end of first half of next year.

    Cost of synergies conservatively estimated at N30 billion per annum, pre-tax, to be fully realised within three years post-completion.

    Further revenue and balance sheet synergies are to be evaluated by joint implementation committee.

    The pro-forma capital position of the merged bank will be in full compliance with regulatory requirements for significant financial institutions with an international banking presence.

    However, in order to meet international standards of best practice and ensure a robust capital buffer, both banks expect to achieve a post-completion Capital Adequacy Ratio (“CAR”) of 20 per cent at the bank level and 22 per cent at the group level.

    The key elements are – Diamond Bank to take further impairments in line with IFRS9, to be reflected in year end 2018 results.

    Access Bank has finalised terms and obtained regulatory approvals for a Tier II capital issuance, which will raise $250 million, available for drawdown in January 2019.

    Commenting on the proposed merger, Access Bank’s Chief Executive Officer (CEO) Herbert Wigwe said: “I am delighted to announce that we have received the necessary regulatory approvals to pursue a merger with Diamond Bank, one of Nigeria’s foremost digital and retail banks, subject to final regulatory and shareholder approvals.

    “The combination of our two businesses will create the largest retail bank in Africa by customer base and a very significant player in the Nigerian market.  This is a huge step towards the delivery of our 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.

    “We have a clear plan to maintain our capital strength and are announcing today decisive steps by both banks to ensure their financial stability throughout the process.

    “The overall outcome will be a stable institution with an extremely strong capital adequacy ratio of more than 20 per cent following completion of the merger, which will be a leading competitor in all the markets in which it operates.”

    Diamond Bank’s CEO Uzoma Dozie said: “The merger is positive for all of Diamond Bank stakeholders, including customers, employees and shareholders. In particular, 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.

    “In reaching this decision, the shared passion for leveraging Nigeria’s youthful and entrepreneurial talent, and a commitment to better outcomes through financial inclusion have convinced us that this is the right combination.

  • Access Bank, E-Tranzact seek approval for N82b rights issues

    The boards of directors of Access Bank Plc and E-Tranzact International Plc have called for an extraordinary general meeting of their shareholders to approve new equity issue.

    Access Bank is seeking to raise N75 billion from existing shareholders through a rights issue while E-Tranzact is seeking to float a supplementary issue to raise N7 billion new equity funds.

    Regulatory filings at the Nigerian Stock Exchange (NSE) indicated that shareholders of Access Bank are scheduled to meet in Lagos on February 1, 2019 while shareholders of E-Tranzact will be meeting in Lagos on January 17, 2019.

    At the meeting, shareholders of Access Bank are expected to consider increase in the authorised share capital of the bank from N20 billion to N35 billion, thus increasing the shares from 38.0 billion ordinary shares of 50 Kobo each and 2.0 billion preference shares of 50 Kobo each to 68 billion ordinary shares of 50 kobo each and 2.0 billion preference shares of 50 kobo each through the creation of 30 billion ordinary shares of 50 kobo each.

    The meeting is expected to authorise the director of Access Bank to raise additional equity capital of up to a maximum of N75 billion by way of a rights issue in the ratio, on such terms and conditions and on such dates as may be determined by the board.

    If the rights issue is undertaken prior to the implementation date of the merger between Access Bank and Diamond Bank, the rights issue will also include a provision that allows Access Bank to issue shares to shareholders of Diamond Bank, under the same terms.

    Shareholders of E-Tranzact are expected to authorise their board to raise additional capital of up to N7 billion “through the issuance of any form of equity instrument(s), whether by way of public offering, private placement, rights issue, offer for subscription or other methods they deem fit, with or without preferential allotments, either locally or internationally, at such dates and on such terms and conditions as shall be determined by the directors”.

    The meeting is also expected to empower the directors to consider as an alternative or addition issuance of convertible or non-convertible loans. The meeting will also enable the company to issue undersubscribed shares to interested investors as well as absorb excess subscriptions.

    E-Tranzact shareholders are also expected to increase the company’s authorised share capital from N2.1 billion or 4.2 billion ordinary shares of 50 kobo each to N9.1 billion or 18.2 billion ordinary shares of 50 kobo each.

     

  • Diamond Bank’s merger: Access Bank increases capital raising to $457m

    Access Bank Plc could raise up to $457 million or about N165.6 billion in new debt and equities capital to support ongoing business combination with Diamond Bank Plc. Access Bank will be the post-merger entity and its Group Managing Director, Mr Herbet Wigwe, will remain the chief executive of the enlarged bank.

    At a joint media briefing in Lagos yesterday to outline key details of the business combination, Access Bank and Diamond Bank said the business combination was driven by value accretion and synergies, citing the potential to become Africa’s foremost financial institution.

    Access Bank said it has received regulatory approvals to raise up to $457 million, equivalent to about N165.58 billion, in tier 11 capital and equity funds to ensure that the post-merger entity has robust capital buffer in line with national and international requirements.

    Read also: Diamond Bank’s managers to go

    The capital raising includes a $250 million tier 11 capital and a $207 million rights issue. Both capital raisings are expected to be concluded in the first half of 2019, in time for the completion of the business combination, which is also scheduled for the end of first half 2019.

    In order to meet international standards of best practice and ensure a robust capital buffer, Access Bank and Diamond Bank have also jointly agreed a strategic capital management plan and expect to achieve a post-completion Capital Adequacy Ratio (CAR) of 20 per cent at the bank level and 22 per cent at the group level.

  • Access Bank’s FinCon Unit gives back to society

    The Financial Control (FinCon) and Enterprise Business Services Unit of Access Bank Plc yesterday hosted students from the Correctional Centre for Senior Boys, Isheri Lagos; Special Correction Centre for Boys, Oregun and Correctional Centre for junior Boys, Yaba, in Lagos.

    The programme is part of the bank’s  Corporate Social Responsibility (CSR) plan to the overall success of its operation.

    The students from the three institutions competed for best performers in music and arts at a competition organized by the lender. Present at the event were three judges and representatives of the Lagos State Government. Aside the group presentations by the three institutions, there were also individual talent exhibition through singing and playing of musical instruments.

    Speaking at the event, Access Bank’s Chief Financial Officer (CFO), Seyi Kumapayi, said the lender wants to touch lives of the students in a. Positive manner by making them to become better members of the society.

    He said: “We want to touch their lives in a positive manner. We chose students from different correctional institutions to see how we can impact their lives positively and make them better persons within the communities where they live. We have gone to orphanages and other places where less previledged people live,” he said.

    Continuing, Kumapayi said that the FINCON Unit of the bank wants to encourage the children to do their best and also display their talents and watched by the three judges who will assess their performances and reward the winner accordingly.

    Also speaking, Principal, Correctional Centre for Senior Boys, Isheri Lagos, Koleso Olatunde, said many of the boys in the genre are without parents and needed support to be integrated into the communities.

    He said many of the boys are from Lagos and other states within the federation adding that the facility belongs to Lagos State. “Some of the students come from broken homes and we have to return them back after their integration. We ensure that many of them learn trade, go to school and even handiwork that will make them successful and responsible members of the society,” eh said.

    Olatunde said that many of the children need mentors to help them navigate their current challenges and become better citizens.He thanked Access Bank Plc for the support given to the children, adding that it is a Corporate Social Responsibility that should be emulated by other banks.

    At the end of the programme, the winning institution was given musical instrument by the bank.

     

    According to the bank’s Corporate Social Responsibility Report, its CSR philosophy was developed in accordance to relevant international standards and guidelines such as the AA1000 Assurance standards and the Global Reporting Initiative (GRI) G3 sustainability reporting guidelines.

     

    The report focuses on the Group’s approach to sustainability with respect to specific environmental and social issues that were of interest to bank’s stakeholder groups.

     

    The bank has successfully made its impact felt in the area of Corporate Social Responsibility and empowerment. Recently, Access Bank Plc hosted an innovation challenge where several ideas were pitched by participants with a view to finding solutions to problems in agriculture, transportation, security and power, in line with its corporate strategy of developing innovative solutions that drive economic development.

     

     

  • Diamond Bank’s managers to go

    Diamond Bank Plc’s acquisition by Access Bank Plc is official.

    Yesterday’s confirmation of the deal has reinforced the story exclusively reported by The Nation on November 12.

    Diamond Bank’s Chief Executive Officer Uzoma Dozie announced that the bank’s board had selected Access Bank as the preferred bidder for a potential merger.

    But the deal will come at a heavy cost to the Diamond Bank management team, especially on job security. The management team is likely to be disbanded.

    “You cannot have two managing directors of a bank, domestic and foreign operations and even chief financial officers in one bank. One has to give way and the Diamond Bank staff will be the casualties. The Diamond Bank management team should know that their jobs are gone,” former General Manager  Richard Obire said.

    According to him, Access Bank is a very ambitious lender and that is one of the characteristics of its management team.

    Obire said: “They want to be big, and perhaps, the biggest bank in Nigeria and that was presented to them on a platter of gold by the Diamond Bank opportunity. Diamond Bank is now a small bank compared to its peers. It is now a tier-3 bank. I do not know the terms of the transaction but they will lose their brand name.

    “It is the reality of business. Diamond Bank has such a brilliant brand name and customer base and these are what Access Bank will inherit. The name Diamond Bank is gone forever and the next will be integration, which will lead to exit of the bank’s management team.”

    An industry source told The Nation that Access Bank’s decision to acquire Diamond followed a presentation made to it last week by its financial advisers in London, which showed huge strengths inherent in Diamond Bank.

    The board of Diamond Bank Plc yesterday finally announced its merger with Access Bank Plc.

    Both banks recently denied The Nation’s exclusive report of November 12 on any merger plans.

    In the report, this paper exclusively said: “It was gathered that both financial institutions have reached an agreement in broad terms on the acquisition. What is left is the valuation of assets, with a view to determining the level of compensation and systems’ integration, the sources said, pleading not to be named because they are not allowed to talk to the media on the matter.

    “It was learnt that the development leading to the impending acquisition was triggered by Diamond Bank directors who approached Access Bank for intervention in a bid to stave off a possible regulatory intervention that could lead to the withdrawal of the lender’s operating licence in the light of the bank’s depleting capital adequacy ratio on account of a huge  Non Performing Loans (NPLs) portfolio put at over N150 billion.”

    Dozie said  the potential merger of the two banks would create Nigeria and Africa’s largest retail bank by customers.

    He added that the transaction to be completed in the first half of 2019 was in the best interest of all stakeholders.

    Dozie said the completion of the merger was subject to certain shareholder and regulatory approvals.

    He said: “The proposed merger would involve Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger.

    “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 N1 per share in cash.”

    Dozie also said the transaction would include the allotment of two new Access Bank ordinary shares for every seven Diamond Bank ordinary shares held as at the implementation date.

    “The offer represents a premium of 260 per cent to the closing market price of 87k per share of Diamond Bank on the Nigerian Stock Exchange (NSE) as of Dec. 13, 2018, the date of the final binding offer,” Dozie said.

    He said the bank’s shares would be absorbed into Access Bank at the completion of the merger and Diamond Bank would cease to exist under Nigerian law.

    “The current listing of Diamond Bank’s shares on the NSE and the listing of Diamond Bank’s global depositary receipts on the London Stock Exchange will be cancelled, upon the merger becoming effective.

    “The board of Diamond Bank believes that the proposed combination of the two operations provides an exciting prospect for all stakeholders in both businesses,” he said.

    Access Bank Chief Executive Officer Herbert Wigwe said: “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.

    “This could accelerate our strategy as a significant corporate and retail bank in Nigeria and a Pan-African financial services champion.”

  • SEC awaits merger application

    The Securities and Exchange Commission (SEC) was yesterday notified of the proposed merger between Access Bank Plc and Diamond Bank Plc, confirming an exclusively story reported by The Nation.

    The apex capital market regulator, however, clarified that the banks have not submitted formal application for merger, which will form the basis of regulatory approval.

    “The SEC received on Monday, Dec 17 2018, notice of intention by Diamond Bank and Access Bank to merge. The Commission is currently waiting for their formal application,” SEC stated.

    Under extant rules, mergers and acquisitions must be approved by SEC to kick-start the formal process of the transaction, following which the parties will approach the Federal High Court for an order to hold an extraordinary general meeting of their shareholders for their approvals. The Nigerian Stock Exchange (NSE) will also have to approve the merger while the Federal High Court must authorise the final approved merger documents to conclude the transaction.

    Investors appeared to respond positively to the business combination yesterday at the NSE as the share prices of the banks rose by nearly the highest daily allowable change at the stock market. Diamond Bank recorded the highest gain of 9.47 per cent to close at N1.04 while Access Bank followed with a gain of 9.40 per cent to close at N8.15 per share.

    Market sources said the price rally was stimulated by the prospects and consideration of the merger. According to the proposal, Access Bank will acquire the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger. Based on the agreement reached by the boards of the two banks, 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 seven Diamond Bank ordinary shares held as at the implementation date.

    The offer represents a premium of 260 per cent to the closing market price of 87 kobo per share of Diamond Bank on the NSE as at the close of business on December 13, 2018, the date of the final binding offer.

    After the completion of the merger, Diamond Bank will be absorbed into Access Bank and it will cease to exist under law. The current listing of Diamond Bank’s shares on the NSE and the listing of Diamond Bank’s global depositary receipts on the London Stock Exchange will be cancelled, upon the merger becoming effective. Diamond Bank expects the transaction to complete in the first half of 2019.