A month after Access Bank denied being in talks with Diamond Bank over a merger, the two banks are set to merge with Access Bank being the principal bank. The two banks signed a memorandum of agreement yesterday, 16th December 2018 while awaiting approval from Central Bank of Nigeria (CBN) and the Nigerian Stock Exchange (NSE).
Diamond Bank’s third-quarter report showed that it has experienced a lot of financial issues, with profit after tax falling from N3.9 billion in 2017 to N1.6 billion in 2018. The bank announced last week its decision to drop its international operating license and focus on national operations following capitalization issues. It would enable the bank to maintain a lower minimum capital requirement of 10 percent rather than the 15 percent required for international banks. Also, one of the bank’s foreign investors pulled out, further contributing to the financial constraints of the bank.
The merger would move Access Bank from the fourth-rank to the second rank in Nigeria’s banking hierarchy, i.e. if the current growth pattern of the bank is maintained. This isn’t the first merger Access bank would be involved in; it merged with now-defunct Intercontinental Bank in 2012. This merger would grant Access bank the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger.
Below is the Ventures Africa Weekly Economic Index, for the week ending 14th of December 2018. This economic index gives you a glimpse into other recent activities in Nigeria’s economy as well as changes and prices that could affect the economy:
Nigerian Stock Exchange
Data released by the Nigerian Stock Exchange (NSE), as of 14th of December 2018, showed that the All-Share Index depreciated by 0.63 percent from the previous week ending 7th December 2018. Market capitalization at the close of trading during the week under review was N11.204 trillion, a 0.58 percent increase from N11.269 trillion recorded the previous week. The All Share-Index for the week under review closed at N30,672.79
Top five price gainers and decliners in the week under review:
Top five price gainers
Forte Oil Plc.
John Holt Plc.
Veritas Kapital Assurance Plc.
Union Bank Plc.
Top five price decliners
Livestock Feeds Plc.
How did the Naira fare?
The Naira appreciated to around N362.84/$, from N363.32/$ that was recorded a week ago.
How did the price of oil fare
Brent Oil prices declined slightly from $61.6 per barrel on the 7th of December to $61.28 on the 14th of December 2018. Oil prices have tumbled 30 percent since the first week of October, from a peak $80 per barrel to $58 per barrel within a month.