Former CEO of Diamond Bank Plc, Uzoma Dozie, has mentioned the 2019 merger between Diamond Bank and Access Bank was the suitable strategic determination, citing market realities, capital necessities and long-term sustainability.
Dozie made the remarks whereas talking on a Reside Viewers version of Drinks & Mics podcast, which is to air by 6 pm on Friday, on Nairametrics YouTube channel.
He mirrored on the considering behind the merger, six years after it reshaped Nigeria’s banking panorama.
The merger obtained remaining regulatory approvals from the Central Bank of Nigeria (CBN) and the Securities and Trade Fee (SEC) in March 2019.
Following the transaction, Access Bank Plc emerged as the biggest bank in Africa by customer base, considerably strengthening its retail banking footprint whereas consolidating its place in company banking.
Strategic evaluation of the market
Explaining the rationale behind the choice, Dozie mentioned the management of Diamond Bank assessed the longer term relevance of the establishment in a quickly evolving banking surroundings.
“You take a look at it from, the place are we going to be within the subsequent 5 years?” he mentioned.
“And even when we have been one of the best at what we have been, we received’t nonetheless be related. Now when you take a look at the market, at the moment, you had tier one and tier two.”
Dozie famous that Diamond Bank was firmly within the tier-two class, regardless of its robust retail banking capabilities.
“So we have been tier two, however we have been an amazing retail bank, unbelievable retail bank. However in three or 5 years’ time, is the market going to say… with any consolidation, will it nonetheless be a related participant?” he requested.
Scale, capital and the push for consolidation
In accordance with Dozie, the banking sector was already shifting in a route the place scale and entry to capital have been turning into decisive benefits.
“As a result of ultimately, the market was shifting in the direction of the larger you’re, the higher sources have been allotted to you, and we didn’t see that,” he mentioned.
He defined that combining Diamond Bank’s retail energy with Access Bank’s company banking dominance created a complementary construction.
“If we might complement a company that was superb at company and retail, then you definitely get numerous worth,” he mentioned.
“And it signifies that the synergies are really higher as a result of meaning there might be much less job losses. You complement on totally different sides.”
Shareholders, capital and the way forward for banking
Dozie additionally pointed to shareholder issues and capital flows as main elements behind the choice.
“From a shareholder perspective, massive bank,” he mentioned.
“In the long run, capital goes to the place individuals suppose that the longer term is. And the longer term… you possibly can see even now, the longer term is in digital, but additionally in massive capital.”
He pressured that measurement stays a vital determinant of competitiveness within the banking business.
COVID-19 validated the determination
Dozie mentioned subsequent developments, together with the COVID-19 pandemic, additional validated the choice to merge.
“Don’t overlook, a yr after that, you had COVID,” he mentioned.
“Now, take a look at the market measurement of the tier-two banks in comparison with tier one after COVID — we made the suitable determination.”
What it’s best to know
- Following the merger, Access Bank launched its new model on 1st April, 2019, with 400 branches showcasing their new brand.
- The model was first unveiled in entrance of an elegantly-clad invited viewers on the Eko Lodge & Suites on the night of thirty first March, 2019.
- The gang gathered to have a good time the revealing of the Bank’s new id following the profitable merger between Access Bank and Diamond Bank.
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