UPDATE: Brief shareholders on merger, Diamond, Access banks told

Some financial experts on Tuesday urged Diamond Bank and Access Bank, which merged recently, to urgently hold a meeting with their shareholders, to update them on reasons for the merger.

They gave the suggestion in an interview with the News Agency of Nigeria on Tuesday in Lagos.

Director-General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, also said the merger would boost stability and investors’ confidence in the banking system.

Yusuf reiterated that the merger was a welcome development, which might have averted possible crisis in the future.

“The merger has salvaged that situation and ensured that depositors’ funds are protected from undue risk, and also removes the issue of systemic failure in the financial system,” he said.

Yusuf noted that some of the challenges confronting the financial system were due weak corporate governance system.

He, therefore, urged shareholders to rise to their oversight responsibility to ensure effective banking management.

He also urged regulatory authorities to ensure that corporate governance issues were upheld and not breached by the management of any financial institution.

Also, Shehu Mallam-Mikail, President, Constance Shareholders Association of Nigeria, said the two financial institutions should ensure that there was no infraction in their dealings that would affect shareholders.

He urged them to hold a meeting with their shareholders shortly to update them on the modalities and issues surrounding the merger.

Prof. Segun Ajibola, former President of the Chartered Institute of Bankers of Nigeria, said the merger between the two banks was a different picture from that of Skye Bank.

According to him, the decision is a proactive step when compared to that of Skye Bank because the investors in the Diamond Access banks’ merger are known when compared to that of Skye Bank.

“Whether it is merger or acquisition between the two banks, the fact is one big bank is better than two weak banks.

“With this development, one expects a strong, virile and capable institution in the future that will equally protect the interest of the investors.

NAN reports that Diamond Bank affirmed its merger with the Access Bank on Dec.17.
It said that the aim of the merger was to create Nigeria’s and Africa’s largest retail bank by customer-base.