Merger: Access Bank targets 200 million US Dollars as additional capital

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In an effort to keep its capital well above regulatory requirements Access Bank Plc is planning to raise additional capital estimated to about $200 million after the recent deal with Diamond Bank Plc.

This is according to London based newspaper Financial Times.

FT has quoted bankers handling the rights issue to have said the move would enhance the new entity’s capital base and business development.

The proposed business combination deal between the two banks will result to a combined entity with total asset size of N6.108 trillion.

This, according to the third quarter unaudited results of both banks for the period ended September 30, 2018, means that the new combined entity will have the largest asset size among the banks in the country, thereby displacing Zenith Bank Plc and Guaranty Trust Bank Plc, respectively.

Similarly, when the merger deal is concluded, the new institution would hold total customer deposits of N3.543 trillion. This is slightly higher than that of Zenith Bank, which was N3.275 trillion as at the end of September 2018, as well as GTBank’s total customer deposit of N2.239trillion as at the end of the third quarter of 2018.

In addition, the loan book of the new entity would be N2.703 trillion, higher than that of GTBank, which was N1.270 trillion as at September 30, 2018, and that of Zenith Bank Plc which was N2.066 trillion as at September 30, 2018.

The transaction has been approved by the Central Bank of Nigeria (CBN).

According to a statement from Diamond Bank on Monday, it was expected to be completed in the first half of 2019.

The statement added that the proposed merger would involve Access Bank acquiring 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.

Based on the agreement reached by the Boards of the two financial institutions, Diamond Bank shareholders would receive a consideration of N3.13 per share, comprising of N1 per share in cash and the allotment of 2New Access Bank ordinary shares for every seven Diamond Bank ordinary shares held as at the Implementation Date.

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