So, The Nation newspaper carried a report this morning (November 12th) that Access Bank is set to acquire Diamond Bank.

Citing anonymous sources familiar with the matter, the report said the negotiation has reached an advanced stage and a deal could be reached between January and March 2019.

But is Access bank really going to acquire Diamond Bank? It appears that is not entirely true.

A source at Diamond Bank who spoke with Bounce News on the condition of anonymity because he is not authorized to speak on the matter confirmed that Access bank is not going to acquire Diamond bank, as the Nation reported.

According to the source, Diamond bank is already in the final stages of negotiations with a foreign investor to inject some cash into the bank.

He said the foreign investor had given a condition that the Group Managing Director of the bank, Uzoma Dozie would step aside before it commits to the investment.

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Bloomberg had reported this last week, but Diamond had denied it in a statement and this, the source said, was because the bank wants the transaction out of the public domain until the deal goes through. 

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In case you are wondering what the trouble with Diamond bank is, the bank has a non-performing loan trouble. And it is huge – estimated at well over 150 billion naira. This means the bank is going under and desperately needs help.

Last month, the bank’s four directors resigned including its chairman Oluseyi Bickersteth. The bank said on Friday that it was in active discussions to appoint a new board of directors, and that it has the support of its major shareholders, including The Carlyle Group, to ensure successful operations.

Diamond Bank has 61.9% free float while Carlyle owns a 17.75% stake, which it bought for $147 million in 2014 when the bank was trading at 0.6 times book value as against 0.15 times now.

Nigerian businessman Pascal Dozie, who founded the bank in 1990, holds 14.2% with his family.

Analysts have noted that the bank has maintained a 16% capital adequacy ratio, the minimum required by the central bank, which has limited growth and profitability.

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