₦airaland Forum

DrAwo:
Please what do you mean by their problem with Airtel Shares? Can you please explain that part better?



There are 2 broad ways of growing a business...

The first is organic growth which is slower. The orga isation chooses to grow from within. Get on division right and then open another division... Zenith bank has chosen this path and is the master of it...

The second is inorganic growth... This is growth by acquisition... Its faster but has a whole lot of disadvantages... You inherit the problems of the acquired company...

Example is Access and Diamond bank... Their NPL went up crazily after the acquisition but so did their assets, customer base etc...

Look at ETI and oceanic bank as well... They just wrote off all the goodwill in their assets incurred during the acquisition... Look also at their trouble with o&o and airtel shares... ETI might take a 22 billion naira hit if the court rules against them just because they acquired oceanic banks problems...

Either way, Access has chosen to grow inorganically... They would have learnt from their diamond acquisition and might do better in future acquisitions...

If you are interested in Access bank, I'll recommend you keep an eye on their goodwill assets as they acquire companies... Keep a close watch on their ROE and more importantly, ROIC...

Any sustained decline in ROIC should signal that things are deteriorating...

Predstan:
Please I want to apply to this school next fall. Can you give me any hint advice or probably state ur profile if I can tap from it.... Preparing for GRE. Wes Eval: 3.60

Thanks