Stock & Analyst Updates | |
Stock & Analyst Updates | |
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Thursday, January 24,
2019 06:50 PM /By Teslim Shitta-Bey and
Saheed Kiaribe
Highlights
In an effort to keep stakeholders updated on ongoing pre-merger activities between Access and Diamond Bank management of both institutions held a joint conference call meeting today Thursday January 24, 2018. The following were the topical highlights of the call:
Table 1 Access Bank /Diamond Bank merger transaction timeline
Source: Access Bank-Diamond Bank Conference call meeting January 24, 2019
- Capturing quick wins (such as the use of each banks ATM cards on each other’s platforms without the usual interbank transaction charges)
- Preparing a day one to 100 day activity schedule
- Preparing value creation plans
- Designing operating model post-merger
- Designing the corporate architecture of the new larger banking institution that may come into being by Q2, 2019
- Creation of an Integration Management Office (IMO) to handle the human capacity, branch harmonization and technical integration issues that will need to be addressed
- Continuous stakeholder engagement to provide a smooth brand, operational and investor relationship transition
Key discussion Points:
- Result in a N62bln synergy saving on the revenue side. N 40.9bln will come from extended product offering; N8.4bln from expanded digital channels; N6.7bln from the extension of market share in corporate and retail banking markets;N6.2bln to be dug from Treasury sales and expansion of digital channels .
- On the expenditure side, the managers believe that savings of N88.1bln would be made. N40.5 bln or about half of the savings is expected to come from procurement and Facility management; N21bln to come from cost of funds reduction through lower deposit pricing; N12.6bln from IT integration; N13,5bln from branch consolidation; and another N500million would be squeezed from the integration of support functions. This would bring total integration savings to N150.1bln.
The merger managers were of the opinion that going forward the savings would improve investor’s equity returns as the merger would allow for both economies of scale and of scope as fixed costs would be shared over a much larger depositor and borrower base.
Chart 1 Access Bank/Diamond Bank market share by deposits
Source: Central Bank of Nigeria (CBN)
Chart 2 Access Bank/Diamond Bank market share by loans
Source: Central Bank of Nigeria (CBN)
Related News
1. Access Bank Announces
The Cancellation Of EGM Scheduled To Hold On February 1, 2019
2. Access Bank Plc
Announces Date of Board Meeting and Closed Period
3. Access Bank Gets CBN, SEC’s Approval To
Acquire Diamond Bank – Vanguard – Jan 15, 2019
4. Access Bank to have
12million BVN Accounts After Merger with Diamond
5. Nigeria-Based Access Bank And Diamond
Bank Ratings Affirmed On Announced Merger; Outlook Stable
6.
Customers To Access 3,100
Access-Diamond Bank ATMs Free By January 1st, 2019
7.
Fitch Places Diamond and Access on
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8. Moody’s: Access, Diamond Deal, Positive
for Nigerian Banking System – ThisDay – Dec 22, 2018
9.
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February 01 2019 To Seek Shareholders’ Approval on Potential Merger
10. Key Takeaways From The Conference
Call On The Potential Access Bank – Diamond Bank Merger
11.
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ACCESS Dips By -5.52% As DIAMOND Gains 9.62%
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17.
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18. ACCESS, DIAMONDBNK Share Prices Move Up On Potential
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19. Access Bank Confirms The Signing of Memo of Agreement
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20. What Does It Mean That Independent Directors Accuse
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21. Why Diamond Bank Opted For A CBN-Managed Acquisition
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22. Access Bank and Diamond Bank Issue Denials on M and A
23. Diamond Bank Receives CBN Approval To Operate As A
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24. DIAMONDBNK Lost N5.09bn This Week To Date; Extends
November Loss to N15.75bn
25. Diamond Bank Plc - Overblown Fright Or Justified
Concerns?
26. Diamond Bank Trades 59% of Total Market Volume; Hits
208.68m, Highest in 10 Months
27. DIAMONDBNK Has Lost N12.74bn in Market CAP, 39.01 per
cent Month To Date
28. Fitch Downgrades Diamond Bank to 'CCC'
29. Fitch Affirms Access Bank at 'B'; Stable Outlook
30. Nigerian Diamond Bank Downgraded On
Weaker-Than-Expected Asset Quality; Outlook Negative
31. Diamond Bank Plc Postpones 9M 2018 Conference Call Due
to Unforeseen Circumstances
32. Diamond Bank Plc 9M 2018 - Underlying Pressures
Persist
33. Access Bank Plc Q3''18 Results - Lower Cost of Funds;
Better Asset Quality Propel Earnings
34. Diamond Bank Plc Refutes Recent Speculations On
Capital Injection
35. Access Bank Plc 2018- 2022 Strategy – Presentation
36. 2018-2022 Transformational Strategy: Access Bank
targets 30ml customers
37. Access Bank Launches New Five-Year Strategy – to
Become Africa’s Gateway to the World