The proposed merger between Access Bank and Diamond Bank will result in significant synergy gains which will begin to appear as early as the second quarter of 2019.
“Value from the merger will begin to show up almost immediately in the second quarter of 2019,” said Herbert Wigwe, CEO of Access Bank, at an event in Lagos today.
The recent Access Bank – Diamond Bank merger has made the new entity to emerge to become the largest lender in Nigeria by assets and other metrics, with total assets of over N6trillion, and 29 million customers.
A combined Access/Diamond has a lot of profit levers to pull including combined operating expenses of N130 billion and Personnel expenses of N58 billion.
Cost synergies are conservatively estimated at N30 billion per annum, pre-tax.
Access Bank has already finalised terms and obtained regulatory approvals for a Tier II capital issuance, which will raise $250 million, available for drawdown in January 2019.
Access Bank has also obtained “No Objection” from the Central Bank of Nigeria (CBN) to undertake a Rights Issue to raise up to N 75 billion ($ 207 million) in the first half of 2019.
Shareholder approvals and other regulatory approvals will be obtained before the offer opens. This accelerates the capital management plan to support retail growth, previously set out in the Bank’s five-year strategy.
ENDURANCE OKAFOR
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