By Uzoma Akobundu
Diamond Bank Plc yielded to be acquired by Access Bank Plc because the apex bank, the Central Bank of Nigeria (CBN) was no longer interested in funding an ailing financial institution, Armadanews.com has learnt.
For sometime now, the CBN was providing lifeline to Diamond Bank whose non performing loans rendered financially illiquid.
The representatives of Access Bank and that of ailing Diamond Bank approached the Central Bank of Nigeria (CBN) on Monday, December 17, 2018 for regulatory approvals of the proposed mergers and acquisition (M&A).
That was because Access Bank and Diamond Bank are in mutual agreement to merge after the later realised that CBN is not interested in funding any ailing bank moving forward, competent sources say.
Accordingly, Access Bank and Diamond Bank ended months of speculations over their future when they finally agreed to merge, signing a Memorandum of Agreement (MoU), which if approved by the Central Bank of Nigeria (CBN) and the Nigerian Stock Exchange (NSE), would move Access Bank, the principal partner, from number four to number two or number one in the nation’s banking hierarchy, if the current growth trajectory of Access Bank is maintained.
Nigerian’s woke up this morning only to hear as truth the deal rumoured a month ago. Back in 2009 Diamond Bank market cap peaked at $1billion, but it has today dropped to $60million as investors continued lose confidence in the bank.
“Well it appears the CBN tacitly dodged a bullet by pushing this through in an attempt not to repeat a “Skyebank”. Imagine the reaction if the CBN had recapitalised the bank with Billions to save depositors funds, at a time many elites have issues with micro credit to traders,” an analysts said.