Determined to create the largest bank in Africa, Access Bank Plc on Wednesday said it had finalised plans to issue $250 million Tier 11 capital in January 2019.
Herbert Wigwe, the bank’s the Chief Executive Officer, said this at a news conference by Access Bank Plc and Diamond Bank Plc on details of the proposed merger of the banks in Lagos.
Wigwe said Access Bank had already finalised terms and obtained regulatory approvals for a Tier II capital issuance to raise $250 million in January 2019.
The News Agency of Nigeria reports that Tier 11 Capital is designed as supplementary capital, composed of items such as revaluation reserves, undisclosed reserves, hybrid instruments and subordinated term debt.
Wigwe said the bank had also obtained “No Objection” from the Central Bank of Nigeria to undertake a Rights Issue to raise up to N75 billion in the first half of 2019.
Wigwe said shareholder approvals and other regulatory approvals to that effect would be obtained before the commencement of the offer.
He noted that the fund raising exercise would accelerate the capital management plan to support retail growth, previously set out in the bank’s five-year strategy.
Wigwe said the bigger entity was ready to absorb the staff of Diamond Bank at the completion of the deal by end of June 2019 without any disengagement.
According to him, the decision will enable Access Bank to leverage the best talents of both institutions to create a leading banking franchise in Nigeria.
He said the combined bank would be led by Access Bank’s current CEO, Herbert Wigwe, and retain the Access Bank name.
He said: “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 brings 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 is to be concluded via Scheme of Merger following Access Bank and Diamond Bank Court Ordered Meetings expected in March 2019 to approve terms.”
He added that the merger, subject to shareholder approvals, the Securities and Exchange Commission, CBN and Pension Commission regulatory approvals and as well as Federal High Court sanction, would be concluded before end of first quarter of 2019.
He said Diamond Bank would benefit from Access Bank’s strong culture of risk and capital management expertise and a clear strategy for sustainable growth.
Wigwe stated that Access Bank would 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 said.
Wigwe explained that Access Bank had a strong track record in mergers and acquisition in Nigerian banking and had previously demonstrated its integration capabilities in the successful acquisition and subsequent absorption of six institutions in the past 15 years.
Also speaking, Uzoma Dozie, Diamond Bank Chief Executive Officer, said the merger was positive for all the bank’s stakeholders, including customers, employees, and shareholders.
Dozie said: “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 name 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.
“I believe that the combination of two strong and admired brands, with shared values and complementary strengths, will be a strong force for positive change in the Nigerian and African retail landscape.
“As a result, this merger creates significant potential for sustainable long-term growth which stands to benefit customers, employees and shareholders alike.”