The recent merger arrangement between Access Bank and Diamond bank has continued to generate a lot controversy in the nation’s financial industry.
While some shareholders of Diamond bank kicked against the merger, describing the transactions as greed and selfishness, others see the partnership as a step in the right direction.
The association of concerned shareholders of Diamond bank said they did not sanction the on the going merger discussion between the two banks.
A statements issued by the group signed by Chief E. O. Orji and Mazi C Onwunna, said that greed was the only reason why Chief Executive officer of the Bank, Uzoma Dozie and founder of the bank allowing Access Bank to take over the institution, insisting that it was not for the interest of all stakeholders including the shareholders, board and staff of the Bank.
The group pointed out that the poor performance recorded by Diamand bank was due to lack of strategy and incompetency of the CEO, stressing that the shares of the bank was about N7 when its previous Group Managing Director left, but it has falling to between N0.60 and N0.70 kobo in recent time.
The aggrieved shareholders said that they have not collected a dime in the last four years as dividend, stating that the essence of the petition was to ensure that their investment would not be allow to be eroded.
But the founder of Independence Shareholders Association of Nigeria, Sunny Nwosu said the development is a good step in the right direction when compared to the case of Skyebank where a bridge bank was formed to the detriment of shareholders.
He, however, said that Access Bank needed to authenticate the deal by holding an extra-ordinary general meeting of the bank’s shareholders immediately all the regulatory processes are completed.
Speaking further he said “What we want to hear is how they tend to administer such big institution. It is better than what Nigeria Deposit Insurance Corporation (NDIC), Assets Management Corporation of Nigeria (AMCON) and Central Bank of Nigeria (CBN) is doing. We hope our investment will be taken into considerations.
“It is now a quoted company to a quoted company so Access Bank should authentucate the deal by organising an EGM. Diamond Bank should also authenticate the sell-off of the bank. This shows that it is a peaceful transaction.”
Corroborating his view, another shareholder, Mr. James Osakwe said the deal is a welcome development unlike issue of the three banks that were nationalised and taken over by the CBN in 2011.
According to him, the merger would transform Access Bank into a bigger entity in the global arena.
He urged the management of the bank to deepen their offshore operations to enhance its performance and boost profitability.
“Because we are the shareholders of the two banks, we have not lost anything unlike the case of Skyebank. This is a better deal for us as shareholders. All the regulatory parties to the transaction should approve it.”
A financial analyst, Mr. Ifeanyi Odunukwe described the merger as a good deal for holders of Diamond bank shares, adding that with the acquisition, Access Bank is to pay Diamond Bank shareholders N1 per share plus two units of Access bank shares for every seven units of Diamond bank shares to shareholders.
In his explanation, he said with 10,000 units of Diamond Bank shares, a shareholder is entitled to N10,000 and 2,857 units of Access Bank shares.”
Stating the benefits and rationale for the merger, the chief executive officer of Access Bank, Herbert Wigwe said “Diamond Bank would 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.”
He further said that Access Bank plans to leverage the best talent of both banks and combine them to create a leading banking franchise in Nigeria.
The bank share recorded its worst performance in November with share plunging to 0.61kobo per unit on November 30, 2018.
The third quarter result of Diamond Bank 2018 had showed that the bank was under some financial stress with profit after tax falling from N3.9 billion in 2017 to N1.6 billion.
This impacted the bank’s earnings per share, which also dropped sharply from N17 in 2017 to N7 in 2018.