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Diamond Bank’s Managers to Lose Jobs over Access Bank Acquisition



Diamond Bank Plc’s acquisition by Access Bank 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,” Richard Obire, a former chief at Diamond Bank 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.”


Uzoma Dozie, Diamond Bank’s chief executive officer 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.


Herbert Wigwe , Access Bank chief executive officer 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.”

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Banks Set Up Special Funds for ICT, Other Sectors



Bankers Committee has said it is setting aside special funds to provide capacity and support to the creative and the ICT industries.


The initiative will be funded from at least 5 percent of the Agriculture/SME Investment Scheme (AGSMEIS) fund.


The AGSMEIS is a special fund that sees the banks’ reserve 5 percent of their profits after tax to fund agriculture and small businesses.


The fund was tipped to reach N90bn by the end of 2018.


Briefing journalists at the end of 342nd Bankers Committee meeting held in Abuja Mr. Herbert Wigwe, MD/CEO Access Bank, said the intervention would be specially set aside for the music, movies, fashion and ICT sectors.


“The Bankers Committee after a lot research identified the ICT and the creative sectors as critical sectors to support social and inclusive growth in Nigeria. We found out that that sector will generate significant amount of jobs and contribute to GDP growth’’ he said while explaining the reasons for the direct interventions in those areas.


He also said that the funding would be under a reasonable interest rate and structure until they become profitable, adding that hopefully Nigeria should begin to see the impact in the next quarter.


Also commenting, Dr. Mudashiru Olaitan, director Development Finance, CBN, said with the support, the 37 million MSMEs in Nigeria will be able to support more jobs.


The Bankers Committee is also looking at providing shared power facilities to power the MSMEs for productivity he said adding that already the pilots have commenced in Aba, Kano, Lagos and Ibadan.

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FIRS Lifts Ban on Bank Accounts of Tax Defaulters



Federal Inland Revenue Service (FIRS) has written to banks, directing them to lift the lien on tax defaulters’ bank accounts for 30 days.


The directive, which takes immediate effect, was contained in a letter from Tunde Fowler, chairman, FIRS, to bank managing directors.


The FIRS explained that it issued the directive because of the large number of taxpayers, who have besieged its offices in their bid to regularize their tax positions and the inconveniences they are going through.


In September 2018, Tunde Fowler, FIRS chairman, said the service was going after 6,772 tax defaulters, stating that they would have their account frozen till they pay due taxes.


“So, all these ones of TIN and no pay and no TIN and no pay, to the total of 6772 will have their accounts frozen or put under substitution pending when they come forward,” Fowler had said.


KPMG, one of the Big Four auditors in the world, said on Thursday that the Federal Inland Revenue Service (FIRS) has gone draconian by giving fiats to banks to freeze accounts of suspected tax defaulters.


KPMG said “nothing in the CITA or FIRSEA authorises the FIRS to impose a freeze order on a taxpayer’s bank account beyond the amount of tax proven to be due and payable by that taxpayer”.


It added that the move was in contravention of CITA, and breaches the confidentiality between the banks and their clients.


“Generally, a bank has a fiduciary obligation to maintain the confidentiality of its customers and their transactions, and to prevent third-party access to the customers’ account information,” KPMG had said.



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CBN Orders Banks to Send Politically Exposed Persons Data to NIBSS



Godwin Emefiele, Governor of the Central Bank of Nigeria

Central Bank of Nigeria (CBN) has directed Deposit Money Banks (DMBs), Micro-Finance Banks (MFBs) and other financial institutions to send data fields on Politically Exposed Persons (PEPs) as part of the Industry Customer Account Database (ICAD) submitted to the Nigeria Interbank Settlement System (NIBSS).


Mr. Dipo Fatokun, director, Banking Services Department, in circular posted on its website, said that the need for the additional information was due to: “the growing demand for more detailed information on bank accounts, for economic intelligence analysis.”

The CBN stated: “Please recall that the Management of Central Bank of Nigeria (CBN) directed all the Deposit Money Banks (DMBs) to forward customers account details in a specified format to the Nigeria Inter-Bank Settlement System (NIBSS), with a view to maintaining an Industry Customer Account Database (!CAD). The initiative contributed immensely towards improving the efficiency and safety of electronic payments in Nigeria.


“In view of the growing demand for more detailed information on bank accounts, for economic intelligence analysis, it has become necessary to expand the coverage of the required data on customers’ accounts. Consequently, two new data fields, covering Politically Exposed Person – PEP (Y/Nl and Sector code have been added to the existing fields on ICAD. “

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