Talks on for Access Bank to acquire Diamond Bank

Access Bank is set to add Diamond Bank’s portfolio to its assets in the next few months.

Talks on the acquisition are on, according to sources, who said the fusion is set for the first quarter of next year.

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 license in the light of the bank’s depleting capital adequacy ratio on account of a huge Non -Performing Loans (NPLs) portfolio put at over N150billion.

It was equally gathered that Access Bank directors examined the proposal and, after series of meetings and evaluations, accepted to acquire the entity. However, the agreement so far reached, it was understood, will not alter the name of Access Bank nor its management structure.

“It’s a complete acquisition and not a merger,” a source, who asked not to be identified, but who is familiar with the transaction, said, adding that one of the major considerations that swayed Access Bank’s directors in accepting the offer was the large branch network of the lender. “It’s burgeoning NPLs, however, was of serious concern to Access Bank and almost becoming a disincentive, but it has been addressed,” the source added.

More information gathered, indicated that the CBN is well acquainted with the development. The regulator’s acquiescence to the deal was informed by the recent event that led to the liquidation of Skye Bank, and the apex bank not being disposed to following that route because of the huge cost implication that a bailout of Diamond Bank might require, encouraged the discussions, “and the regulator is pleased with the level of discussions so far.”
“The CBN encouraged the ongoing arrangement, given the fate that befell the defunct Skye Bank a few months ago. The apex bank gave its consent and approval for the actualisation of the marriage. ”
 It was also learnt that the regulator’s un-alloyed support for the emerging entity followed its unpreparedness to commit any further huge funds for the rescue of any wavering bank.

Bloomberg reported that a major investor was in the process of injecting funds into Diamond Bank on condition that the CEO, Uzoma Dozie, exits his position. The report attributed to the Chairman, Seyi Bickersteth, has since been denied by the bank.

Diamond is one of a number of smaller Nigerian lenders struggling to maintain a regulatory requirement for banks with international operations to have reserves of capital that cover at least 15 percent of outstanding loans. The company’s ratio stood at 16.3 percent at the end of September, the lender has said.

The bank cut its full-year profit forecast by more than half on Tuesday after income from operations declined. It now expects profit before tax to reach 3.8 billion naira ($10.4 million), down from a previous target of 8 billion naira.

The shares rose 2.5 percent on Wednesday, trading at 1.21 naira at the close in Lagos. The stock is down 19 percent this year, compared with a 12 percent fall on the NSE Banking 10 Index.

Diamond Bank, in a statement, said contrary to media articles, “The Board wish to clarify that the company has not received an offer from an investor to inject cash. Further to the Company’s announcement of 26 October 2018, Diamond Bank and its Board of Directors continue to review all strategic options on a regular basis. Diamond Bank would also like to clarify it enjoys the support of its major shareholders, including The Carlyle Group and Kunoch Holdings who are, as ever, working in cooperation with the Board and management as appropriate to ensure the successful operation of its business in Africa’s most dynamic banking market.

“Further to the announcement of 24 October 2018, Diamond Bank is in active discussions with regards to the appointment of new non-executive directors to the Board and, subject to CBN approval, these will be announced in due course.” “Diamond Bank’s recent Third Quarter results published on October 26, 2018 show the business continues to execute its clearly articulated tech-led retail strategy despite headwinds in the Nigerian economy,” the bank stated.

CBN Advice Bank Customers To Always Report Cases Of Exorbitant Charges By Their Financial Institutions.

The Central Bank of Nigeria (CBN) has advised bank customers to always report cases of exorbitant charges by their financial institutions.

The central bank also disclosed that in collaboration with law enforcement agencies, it recently arrested a group of currency mutilation offenders in Ibadan, Oyo State, for abusing the Naira.

The Director, Corporate Communications, CBN, Mr Isaac Okorafor, said this in Lagos at the weekend, during the CBN Day, at the just concluded Lagos International Trade Fair.

Responding to questions on excessive ATM charges and other bank charges, Okorafor said: “If you feel aggrieved that an ATM is extorting you, if it happens, take out time to go your bank to protest. And if they deny, do it in writing after you get their response and whether they respond or not, just bring it to us through an email and we would take note of it.

“If consumers of financial services do not stand up to insist on their rights, CBN would not be in any banking hall trying to protect you. So please find time to report any wrong doings by the banks.”

He, however, explained that banking services that provide convenience have had various levels of investments which customers need to pay for, but not above the required pegged rate.

He further added: “Banking services are not free anywhere in the world. If you can stay in your bedroom to make a transfer in the comfort of your bedroom, someone is paying for it and it is not government subsidy.
“People have invested in the bank, switches and in all the systems and those investments, people have made and they wait to reap from it. But what the CBN would not do is to allow your banks to reap you off.”

Also, speaking on recent warning to those who mishandle the Naira, he said: “In collaboration with law enforcement agencies, we are happy to record our first conviction of someone who abused the Naira in Ibadan yesterday.

“We are collaborating with the Police because it is their duty to enforce the law and we are also talking with the judiciary to ensure that we provide mobile courts and judges are designated.”

He appealed to Nigerians to desist from abusing the Naira, because those caught could go to jail.

Okorafor, also urged more women to approach banks for its micro, small and medium scale enterprises loans, saying: “We have a special place for women and we have increased the number of women we have because we believe that women are more efficient, more reliable and more enterprising than men.

“It is easy to give more loans to women because they will pay back. They are not like those of us (men) who may not pay back.”

He said the Bank had developed schemes for financing businesses especially the MSMEs through its development finance initiatives.

Your Duties As A Bank Customer

“People tend to forget their duties but remember their rights” – Indira Ghandi. 

But this won’t be you! 

No matter how grounded you are in the knowledge of your rights as a bank customer, faulting in the performance of your duties will only birth more unpleasant banking experiences.
So, here are some duties you should be aware of and perform at all times as a bank customer.

1. Duty of knowledge and understanding:
This represents the cornerstone of your duties as a bank customer and involves the search for relevant knowledge that should lead you to make informed decisions and enhance your benefits. Without adequate knowledge, customers are bound to make ill-informed decisions which may precipitate an avalanche of complaints from customers against their banks. It is generally agreed that sophistication in the banking industry has tasked the understanding of even people that are financially literate; it is, therefore, your responsibility to “shine your eyes” when dealing with your bank.

2. Duty of financial obligation:
This requires customers to repay credit facilities and pay mutually agreed interest on loans and other financial services rendered by their banks as and when due. This is one of your major responsibilities to the extent that banks are established to provide loans and other financial services to you and other customers. Thus, you are obligated to ensure that payments or repayments to your bank are not delayed in order not to suffer penalties in the form of default charges.

3. Duty to protect instruments and information:
It is your duty as a bank customer to keep your cheque book, ATM and all information relating to your account like PIN, passwords and codes safe. It is important to stress that a bank cannot bear responsibility for any loss incurred by customers as a result of their negligence in protecting vital instruments or information.

Let’s take a break and digest these three for now. I’ll share more in subsequent time.

Stay informed.

Nigeria's Economy To Grow By 1.9% in 2018 - IMF

The International Monetary Fund (IMF), has predicted that the Nigerian economy is expected grow by 1.9 per cent in 2018, up from 0.8 per cent in 2017, due largely to fewer disruptions in oil production.

Amine Mati, the IMF Senior Resident Representative in Nigeria gave the projection while presenting the “Fall 2018 Regional Economic Outlook for Sub-Saharan Africa’’ on Thursday in Abuja.

Mr Mati said that some pick-up in the non-oil economy was also responsible for the predicted growth rate.

According to him “The recovery is expected to contribute about 0.7 percentage points to the region’s average growth in 2018 and lift activity in Nigeria’s trading partners through stronger remittances, financial spillovers and import demand.’’

He also said that average growth for the region was expected to reach about 3.1 per cent in 2018, up from 2.7 per cent recorded last year.

The IMF representative also noted that recovery in sub-Saharan Africa was expected to continue amidst rising risks as growth momentum improved most notably for oil exporters, mainly in Nigeria, but remains subdued in South Africa.

He said that as the magnitude of capital flows to the region increased, the volatility also increased.

Mati however warned that further escalation of trade tensions could threaten recovery in the region, adding that if the tensions persist, it would have potential impact on Gross Domestic Product (GDP).

On the nation’s debt service burden, Mr Mati admitted that public debt was diverting more resources toward interests payments, adding that for Nigeria, though debt to GDP was quite low, more than 50 per cent of its revenue is nowbeing devoted to interest payments which he lamented was quite unhealthy for the country’s economy.

He also noted that raising the nation’s revenue was verycrucial to bridging the gap to ensure that revenue to GDP was sufficient to pay up and service the debt profitably.

The IMF representative also said that meeting the Sustainable Development Goals (SDGs would require stronger growth and more financing.

He said that policies that would enhance creation of about 20 million new jobs yearly in the region to meet the demand was needed as meeting the SDGs by 2030 would be dependent on that.

He argued that job creation was complicated by uncertainty on the extent to which technology replaces labour.

Meanwhile, Nnanna Okwu, the Deputy Governor, Economic Policy, Central Bank of Nigeria (CBN), said capital inflows into Nigeria responds to both domestic and external shocks.

Represented by Friday Ogwuche, also of the CBN, he said Foreign Direct Investments (FDIs), inflows were becoming more diversified in response to the changing structure of the Nigerian economy. He said that there were certain factors shaping capital inflow behaviour in recent times, adding that high oil prices and growth in external reserves provides confidence for capital inflows into the country.

Mr Okwu also said that tepid recovery from recession and relatively stable macroeconomic environment provided impetus for capital inflows back to Nigeria between 2017 and 2018.

“Also, uncertain political environment as a result of the 2019 general elections is a source of concern for foreign investors and may have influenced capital reversal in recent months,” he also said.

Sacked Banker Arrested For Stealing 14m From ATM

The FCT Police Command yesterday paraded one Emmanuel Emeka Onuma for allegedly breaking into the vault of an Automated Teller Machine (ATM) and carting away N14 million.

Onuma was one of the 15 suspects paraded for various offences by the Command’s Assistant Commissioner of Police (Operations), ACP Valentine Olumese.

The suspect, according to the police, was an employee of the bank (identified simply as one of the new generation banks) where he was sacked in August this year for fraudulent activities.

The suspect told journalists that he worked with the bank for about 11 years and that he was dismissed unjustly without any benefit. He however said there was no justification for what he did.

Explaining how the suspect was arrested, ACP Olumese said, “On 1st November, 2018 in furtherance with an on-going investigation, police operatives attached to Garki Division arrested one Emmanuel Emeka Onuma ‘m’ 34 years old who broke into the ATM lobby of a bank located in Garki on 19th October, 2018 at about 12 midnight and stole the sum of N14 million.”

He said the suspect confessed that some of the money he stole from the bank was converted to foreign currency ($33,000) at Abuja and Kaduna for ease of movement. He added that $28,000, N1,650,120, nine pieces of Ghanaian cedis and flight tickets were recovered from him.

Transfers On Ecobank Radpidtransfer To Cost Zero Fees

Ecobank Nigeria has introduced zero fees for all transfers done into Nigeria on its newly launched Rapidtransfer app.

Managing Director, Ecobank Nigeria,  Patrick Akinwuntan, announced this in Lagos, saying,  “Ecobank is poised to ensure Nigerians in the diaspora get the best in class remittance service. We want to make it easy for Nigerians living abroad to send money to their loved ones at home instantly. Transfers on the Rapidtransfer app are at zero fees from now till end of January, 2019”

He reaffirmed that the Ecobank Rapidtransfer app, which follows a tradition of leadership in digital banking in Africa,  is designed to enhance remittances to Africa by drastically reducing cost, while also tackling the long, burdensome and inefficient processes Africans abroad face when sending money to their home countries.

Akinwuntan urged Nigerians to tell their relatives abroad to take advantage of this new and innovative means of remitting hard earned monies home noting,
“Many Nigerians work abroad and financially support their relatives back home. The app is a safe and secure low-cost remittance solution, which ultimately will put more money into the hands of the recipient as there are no charges deducted”.

The Rapidtransfer app enables users to easily and instantly send money to any bank in Nigeria. Receivers also have the option of picking up cash at any Ecobank branch. The exchange rates are very attractive and the service is open to Ecobank and non-Ecobank customers. Interesting features of the app include easy navigation and multi-lingual capabilities.

Stock Market: N94.43bn Withdrawn By Foreign Investors Between July And September This Year

The Nigerian Stock Exchange, in its domestic and foreign portfolio investment report for September, said the amount withdrawn by foreign investors in the third quarter was 23.59 per cent lower than the N123.59bn pulled out in the previous quarter.

The report, however, showed that foreign outflow increased by 27.60 per cent from N34.31 in August to N43.78bn in September.

It said total foreign transactions rose by 18.82 per cent month-on-month in September, while domestic transactions fell by 27.03 per cent.

According to the report, total transactions at the nation’s bourse reduced by 2.79 per cent from N133.84bn in August to N130.20bn in September.

The NSE said the cumulative transactions from January to September 2018 increased by 21.23 per cent to N2.007tn from N1.655tn in the same period last year.

It said, “Foreign investors outperformed domestic investors by 29.54 per cent in September 2018. Total foreign transactions increased by 18.82 per cent from N70.97bn in August to N84.33bn in September 2018".

“Foreign outflows increased by 27.60 per cent from N34.31bn to N43.78bn, while foreign inflows increased by 10.58 per cent from N36.66bn to N40.54bn over the same period.”

According to the report, the institutional composition of the domestic market increased by 14.33 per cent from N22.67bn in August to N25.93bn in September 2018, while the retail composition reduced by 50.38 per cent from N40.19bn to N19.94bn within the same period.

It said the results were an indication of a higher participation by the institutional investors over their retail counterparts in September.

Access Bank Plc dedicates November 5th – 9th 2018 as its Sustainability Awareness Week to Celebrate 10 Years of Sustainability Principles

As a way of re-enforcing its commitment to sustainability principles and commemoration of  the bank’s 10 years of sustainability, Access Bank Plc has dedicated November 5th – 9th 2018 as its Sustainability Awareness Week.

This CSR Week themed ‘The Journey to a Sustainable Future,’ is aimed at reminding staff of the crucial role they have to play in creating a sustainable future.

“This week will also encourage them to engage in activities that will positively impact the environment as well as touch lives, leaving indelible positive memories on people,” a statement from the bank explained.

The Access Bank Sustainability Awareness Week 2018 will also be held in all the subsidiaries of the bank.

It stated that the week is packed with series of events, one of which is the Employee Volunteering Awareness Day that recognizes the contributions of employees who had championed various innovative initiatives to better the lives of people in various communities.

Additionally, various  training sessions and workshops would be held to educate people on the importance of embedding responsible practices in business operations and everyday life. They will highlight the effect on the triple bottom line- Planet, People and Profit.

As part of its plan for encouraging and promoting healthy living among staff and external stakeholders, the bank said it would  finance the treatment of 100 women with fistula as well as host a weight loss challenge.

Speaking about the Sustainability Awareness Week, the GMD/ CEO of   Access Bank, Herbert Wigwe said: “Protecting the environment is the duty of every human being and business; therefore, looking at the world through a sustainability lens helps us ‘future proof’ our present actions and their consequences in the future.

He also said: “At Access Bank, we are not only in business to maximize shareholders’ value, we consider the social and environmental impact of every aspect of our banking operations and channel our resources to achieve sustainable growth and development in Africa.
“As we carry out our business, we put the community at the centre of everything we do.”

World Bank's $611m to support Universal Basic Education program (UBE) and Out-Of-School Children in Nigeria

The World Bank has released $611 million grant to assist the Federal Government in pursuit of Better Education Service Delivery for All (BESDA) operation in Nigeria. 

The fund is meant to support the Government with a view to strengthening the Universal Basic Education programme (UBE) and out of school children challenges.

The World Bank Task Team Leader in charge of the Better Education Service Delivery for All (BESDA), Hajiya Aisha Garba, stated this on at the flag off of BESDA held in Birnin Kebbi.

Aisha Garba, who is also an Educationist with the Bank, noted that the fund was also to address the first pulled of the Federal Ministry of Education ‘Ministerial Strategic Plan 2016-19 on the out-of- school children ‘.

“The objective of BESDA is to increase equitable access for out -of- school children, improve literacy in focus states, and strengthen accountability for results, in basic education in Nigeria.”

She explained that the BESDA fund was disbursed to the states upon achievement of results, stressing that the performing states were rewarded and could choose their own homegrown interventions which best soothes their constraints.

“The results to be rewarded under BESDA are: reduction in numbers of out-of-school children in basic education; improvement of literacy in basic education and better accountability in basic education through availability of administrative data and evidence-based planning.”

Two Giant World Banking Groups, HSBC And UBS leave Nigeria

The Central Bank of Nigeria on Friday reported the closure of HSBC and UBS offices in Nigeria as it revealed foreign investment had fallen sharply from a year ago.

The CBN said foreign direct investment in Nigeria fell to N379.84bn ($1.2bn) in the first half of the year from N532.63bn ($1.7bn) a year earlier.

It did not give reasons for the banks’ closure.

The central bank said the outlook for the Nigerian economy in the second half was “optimistic” given higher oil prices and production but rising foreign debts and uncertainty surrounding the 2019 presidential election were drawbacks, according to Reuters.

Investor confidence in the West African country has been shaken since the central bank in August ordered MTN to bring back $8.1 billion to the country, part of profits which the South African telecoms firm sent abroad.

An HSBC research note dated July 18 said a second Buhari term “raises the risk of limited economic progress and further fiscal deterioration, prolonging the stagnation of his first term, particularly if there is no move towards completing reform of the exchange rate system or fiscal adjustments that diversify government revenues away from oil.”

The CBN also said three lenders failed to meet its minimum liquidity ratio of 30 per cent, without naming them.

It added that non-performing loans had dropped to 12.4 per cent as of June 2018 from 15 per cent a year ago, still a long way above its five per cent threshold.


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