Most of us half expected that our Diamond Bank alerts would have, by now, been coming with the Access Bank “>>>” prefix. Those who claim, erroneously or not, that Access Bank is the King of Bank charges have already started moving their funds elsewhere while the Access Bank faithful have begun claiming that they are Banking with the biggest Bank in Nigeria- at least by the size of their potential balance sheet.
Trust us Nigerians to always bring our cultural thinking into all things, like beginning to call a lady our wife the moment a man proposes. Well, that is where the proceeding is presently at, Access Bank has proposed and Diamond Bank has accepted the proposal.
The next step, culturally, is that we begin to see both Banks together making marriage arrangements or that they even move in together. We have already seen both Banks give a joint press conference. However, as for the moving in together, CBN being the Chaplain that would eventually join them has insisted that there would be no sex before marriage. They have insisted that both Banks get parental consents (from their shareholders), get a clean bill of health from the Securities and Exchange Commission, secure clearance from a federal high court and from Pencomm to proceed. These are all formalities that should be cleared in a few months.
With a Diamond Bank bride price set at approximately NGN72.5 billion, and Diamond Bank shareholders on course to receive NGN3.13 per share in cash and shares, we can safely assume whose name will be changed. Diamond Bank is already set to take further IFRS9 impairments in its 2018 year end results; sort of like paying old debts to your friends and giving out single stuff so the debtors don’t come and disturb you in your husband’s house. A clean slate kind of feeling. Right?
Access Bank, on the other hand, a polygamist having married six wives in 15years (recall their society wedding with Intercontinental Bank) are experienced in these matters and are already set for a Tier II capital issuance, which will raise US$250 million, available for drawdown in January 2019 and to undertake a Rights Issue to raise up to NGN 75 billion in H1 2019 with CBN approval already in place. Liken that to a prospective husband asking investors in his business to increase their stake to enable him have more funds for his marriage. Their previous rights issue was termed a success, so expect the Access warriors to come knocking your door soon with the arrogance befitting a successful beggar (I mean that in a good way).
So what is in the merger for us? Like any traditional marriage, the bride’s family (Diamond Bank shareholders) gets paid by the groom and the groom gets the wife’s properties added to his holdings. The groom’s family (Access Bank shareholders) lays claim to the wife as our wife- boasting about her beauty and her culinary skills, if any, as their gain in the whole affair. Even after spending their hard earned money to support their brother on his quest (via right issues) they may not enjoy anything tangible but that boast, as Access Bank’s new acquisition may not necessarily translate to higher dividends in the nearest future. They become a bigger bank quite alright. But not efficient.
The make-up artists, photographers et al will have a field day branding and rebranding- highlighting the wife’s beauty and the husband’s wealth. Isn’t that what they live for? The caterers, those of us who report the news, will serve a variety of dishes such as this to make you,the observing well wisher, enjoy the jamboree while it lasts. After-all, society weddings like this only happen once in a long while.
As for that >>> prefix that you are expecting in your Diamond Bank alert, you will have to wait till July 1st 2019. That’s the tentative date according to the proposed timeline for the deal completion.