Business Hilights
Tracking Nigeria's Headline Business News Online

Top Leaderboard Advert Space

‘Election result may make or mar Diamond/Access Banks merger’

…As both test run parallel Val offers to customers 

As things stand now, both at the financial and capital markets, air of uncertainties is compounding effectiveness of business projections and trajectories to the extent, there are fears of possible abandonment of both veiled and unveiled merger and acquisition plans in the sector.
This is coming from varying signals associated with the shifted presidential election.
Some industry experts who barred their minds on the economic policy trusts of the two leading presidential hopefuls, say the economic blueprint of whoever that will win the election will have a strong influence on the budding Access-Diamond bank merger.
Many are of the opinion that whoever that wins will clearly create room for analysts to find out whether it is a merger deal or hostile acquisition that is going on as both institutions are holding the real thing in their mind up in their chest even as everybody is pointing towards merger when happenstances are not saying exactly so.
For example, Access Bank is yet to expunge branch network expansion on its development plan when at the same time, it is hoping to acquire another bank with multiple branch network.
Some say if statuesque remains after the election; hostile acquisition may evolve as others think that if the election produces change of government, either merger or ‘to your tents O! banks’ may fall out.
Already, the fears of many followers of the M&A played out from the languages of both officials of the banks while separately introducing their Valentine promo.
For example, while the Head, Retail Banking, Diamond Bank, Robert Giles, said, “The bank will reward customers who subscribe to Xclusive Plus, reactivate their accounts by updating BVN, grow their balances or do more transactions on the mobile app including setting up and funding Diamond Y’ello accounts,” Executive Director, Personal Banking, Access Bank Plc., Victor Etuokwu, did not promote any Access Bank’s product but only noted that the rewards to Nigerians in the season of love is simply its own way of saying, “thank you to combined customers at Access and Diamond banks for banking with us and welcoming them to the new opportunities as we merge to serve them better.”
Giving credence to some of the experts views on the trending merger plot, the Managing Director/Chief Executive Officer of Kairos Capital Limited, Mr. Sam Chidoka, expressed reservations on chances of strong mergers and acquisitions’ (M&As) this year.
Giving his outlook for 2019 in an interview, he said “Projections for the market in an election are dependent first, on outcome of the presidential election.”
He said” “I think a lot is riding on the elections. And where we are today, the elections are too close to call. So, the trajectory of the economy, especially the sector we play in, which is the financial industry, will be dependent on the outcome of the elections and the outlook of the government.
“We have seen one government in power for over three years; we can guess what they are going to do and there are people trying to take over. When any of them wins, the trajectory will change.
Continuing, he said “All in all, we think that it will be an interesting year for the country. “Already, the first quarter of the year has been sacrificed for elections. We hope that the economy will pick up in 2019, but after Q1. Do not expect anything in Q1. We think that from the second quarter, we will begin to see increased activities in the market.
“Hopefully, the election is not so far drawn in terms of litigations, and we hope there will be no crisis and that it goes the way of 2015. If that happens, post-election activities will come in very quickly and we expect that the crowding out effect in the debt capital market that we have seen, where the Federal Government is issuing one-year securities at 14 per cent to 15 per cent, that crowds out corporate investors because if they want to issue, they have to issue at a premium to what the Federal Government is issuing.
Chidoka made it clear that “We are hopeful that once the elections are over, yields will begin to taper off once again. We are also hopeful that the trajectory of inflation coming down will continue and that the prime lending rate will come down. This will make us find more corporates in the market.