Africa’s largest lender by customer base, Access Bank Plc, has reacted to media reports that it is planning to acquire Union Bank of Nigeria Plc less than six months after acquiring Diamond Bank Plc.
In a statement published on the Nigerian Stock Exchange (NSE) and signed by the Company Secretary, Sunday Ekwochi, Access Bank urged its customers and the general public to ignore the report as there’s no truth in the assertion.
Access Bank went further to state that there is no on-going discussion with Union Bank or any of the company’s stakeholders with respect to acquisition plans.
“Our attention has been drawn to recent social media report of Access Bank Plc is engaged in talks to acquire Union Bank of Nigeria Plc.
“The Nigerian Stock Exchange and the general public are hereby advised to discountenance such rumour as same is devoid of truth. The Bank is not engaged in any discussion with Union Bank of Nigeria Plc or any of its shareholders regarding any such transaction.” Access Bank said in the statement.”
Union Bank also denied consolidation talks, stating it is “mere rumour and speculation’.
However, history picks holes in Access Bank’s statement, as we shall see shortly. Recall that the tier-one bank (i.e., Access Bank) had merged with Diamond Bank Plc in March after informing their investors and customers in December 2018 that the company is looking to merge in order to strengthen its core portfolio, as well as corporate and retail banking services.
The merger between Access Bank and Diamond Bank resulted in the formation of the largest bank in Africa by customer base, even as all Access and Diamond Bank buildings were rebranded with a new logo to reflect the deal which took effect in April.
However, history contradicts Access Bank: The company has a history of denying acquisition and merger reports only to proceed with consolidation months after. The company had also denied media report of its plan to acquire Diamond Bank in November, only to announce in December that it would be merging with Diamond Bank Plc after all.
Access Bank’s denial of any consolidation or acquisition plan is not synonymous to the Nigerian lender alone. Most large corporations, even beyond the banking border, are known to deny acquisition plans when talks are still in the early stages. Most companies prefer to let the cat out of the bag after the deal is sealed.
But Access Bank’s denial holds water: With the merger involving Diamond Bank, which took place less than five months ago, another merger or acquisition might just be too much burden for the bank considering the short timeframe between now and the last deal. Therefore, the company’s denial might, indeed, be true after-all. The company needs to steady the current ship before adding to the number on board.
Note that Access Bank is not new to inorganic growth in the financial sector. Inorganic growth is the use of acquisition or merger by banks to grow its customer base and increase penetration rate. It is the opposite of Organic growth which is the non-application of merger or acquisition by banks that grow their portfolio and customer base single-handedly.
The company had merged with Intercontinental Bank in 2012. Access Bank acquired 75 per cent stake in Intercontinental Bank. Access Bank currently trades at N6.74 kobo per share.
In the meantime, an unnamed tier-one bank is reportedly in talks with Asset Management Corporation of Nigeria (AMCON) to acquire a tier-two bank, Nairametrics has learnt.