Nigeria’s Access Bank is in talks to complete an acquisition deal with Diamond Bank Plc.
In the report by local newspaper, The Nation, sources familiar with the matter said the deal is a complete acquisition and not merger.
According to the report, the deal is expected to be completed in the first quarter 2019.
The newspaper gathered that both financial institutions have reached an agreement in broad terms on the acquisition.
Sources told The Nation that the development leading to the acquisition talks was triggered by Diamond Bank directors in a move against possible regulatory intervention.
The discussion was said to have been premise on its huge Non Performing Loans (NPLs) portfolio put at over N150billion.
“It’s a complete acquisition and not a merger,” the Nation quoted an anonymous source who is familiar with the transaction.
The source also disclosed that Access Bank directors have examined the proposal and accepted to acquire the entity.
Oluseyi Bickersteth, the bank’s chairman and three non-executive directors of Diamond Bank Plc resigned their positions.
Uzoma Uja, the company secretary, in a corporate filing said the resignation varied for personal reasons.
The development, analysts and banking sources, said is to pave way for new capital injections for the new investors to have more feel about the banking operations.
Diamond Bank had denied capital injection talks with new investors. The bank said it will notify the authorities when it is taking in any capital injection.
“While we recognise the need to expand our options in the short term, we have no concrete new development to report and will notify The Exchange once there is any, ” Diamond Bank had said in a regulatory filing.
A banking source confided in Business Insider SSA that Diamond Bank is looking for ways to settle its huge.
“They need more equity for the business to survive and move forward,” the source told BISSA on Monday.
Diamond Bank reported a loss after tax of N9.01 billion in its 2017 full-year financial results as against a profit after tax of 3.49 billion in the preceding year.