Shareholders of Diamond Bank on Monday lost about 12 Kobo per stock from their investments in the bank. The stock market was unsettled by a report on plans for the bank to be acquired by Access Bank.
The bank’s stocks opened trading on the floor of the Nigerian Stock Exchange, NSE at N1.28 but closed at N1.16, losing 12k in the process.
On the other hand, Access Bank, which opened trading at N7.7 gained N1.00 as investors traded with caution.
Stock market analysts believe that Diamond Bank shares may not rebound as soon as investors would expect as a result of the report that not only suggested that it had entered into a discussion with the board of Access Bank for acquisition, but also highlighted its huge non performing loan, which amounts to about N150 billion. The report further made investors believe that Diamond Bank is in dare financial strain.
Although managements of both Access and Diamond banks had separately denied being into any form of negotiations, investors are now on the edge, watching how events will unfold in the next couple of weeks. One of the expectations is a reaction from the Central Bank of Nigeria, CBN, which can authenticate the health of the bank.
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Diamond Bank in a reaction on Monday, denied being in discussions with any financial institution at the moment on any form of merger or acquisition.
The bank described as rumor, the report which said the acquisition process could be concluded by the first quarter of next year.
Similarly, Access Bank Secretary, Sunday Ekwochi, in a prompt disclosure sent to the NSE on Monday said the bank had not entered into any such discussion with Diamond Bank or any other institution.
He further disclosed that the bank would not go ahead with such corporate action without appropriate disclosure to relevant authorities.
The Company Secretary affirmed that: “As a publicly quoted company built on best practice, the bank is fully cognisant of its disclosure obligations in respect of any such corporate action and will always discharge its obligations in the most professional manner.”
