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Business News

Diamond Bank seeks withdrawal of International Banking Lincense

Diamond Bank hopes to convert its current international banking license to a national banking license.

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Just months after Diamond Bank Plc divested 100% of its stakes in its former UK subsidiary, it is now hoping to convert its current international banking license to a national banking license.

The conversion is expected to happen latest in December, 2018.

A ThisDay report published today, claims that a reliable source close to the situation has confirmed this development. According to the source, the license conversion is also expected to place “the Capital Adequacy Ratio (CAR) requirement for the bank at 10 per cent.”

The anonymous source went further to claim that the tier 2 bank is seriously re-focusing its business model, even as it works towards becoming more conservative with its loan portfolio. This new way of thinking is one of the major reasons behind the bank’s decision to  divest its assets in Diamond Bank UK.

“This year, the bank is going to be leaner and from all indications, it will be convertING its licence to a national licence because it has sold its international subsidiaries and doesn’t have an international presence any more. That means its CAR will be at 10 per cent as against 15 per cent”– Source

Understanding the CAR

It should be noted that the Central Bank of Nigeria (CBN) requires banks with national banking licenses to have 10% Capital Adequacy Ratio (CAR). This is 5% less than the 15% that is required of banks with international banking licenses. The reason for this disparity is due to the fact that national banking licensees have smaller operations. This is exactly what Diamond Bank Plc is hoping to achieve.

Why is Diamond Bank streamlining its operations?

As we reported, Diamond Bank Plc had in April, 2018 this year, sold off 100% of its shares in its UK operations to Sanjeev Gupta, the Chairman and Chief Executive Officer (CEO) of GFG Alliance. This followed the company’s earlier decision (in November) to divest its 97.07% equity stake in Diamond Bank SA.

The bank explained that the divestment will enable it streamline its operations in order to “focus resources on the significant opportunities in the Nigerian retail banking market.”

The company has also recognised the immense opportunities that are available in the local market, and is, therefore, making efforts to take advantage of it, even as it hopes to become the “fastest growing and most profitable technology-driven” bank in the country. The divestment will, therefore, help the company optimise its resources towards the actualisation of its refocused business model.

Sigma Pensions

Diamond Bank Plc finally released its 2017 financial report in May, 2018, after repeated delays. Unfortunately, while its revenue increased from ₦184.1 billion in 2016 to ₦189.6 billion in 2017, the company recorded loss after tax of ₦9.01 billion during the year ended December, 2017, as against a profit after tax of ₦3.49 billion in the full-year 2016.

For its Q1 2018 results, the company recorded a 1% decline in interest income at ₦38.13 billion as against ₦38.65 billion in Q1 2017. Profit after tax for the quarter ended 31st March was ₦784 Million as against ₦4.29 billion recorded in Q1 2017.

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Diamond Bank Plc commenced operations as a private limited liability company in 1991. By 2005, its shares were listed on The Nigerian Stock Exchange (NSE).

Its shares are currently trading at ₦1.54.

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Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs.He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor.Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan.If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

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Macro-Economic News

BREAKING: Nigeria’s inflation rate surges to 18.17% in March 2021

Nigeria’s inflation rate for the month of March 2020, rose to 18.17% from 17.33% recorded in February 2021.

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Nigeria’s inflation rate for the month of March 2020, rose to 18.17% from 17.33% recorded in February 2021.

This is according to the Consumer Price Index report, recently released by the National Bureau of Statistics (NBS).

Food inflation spikes to 22.95% from 21.79% recorded in the previous month, while core inflation, which excludes the prices of volatile agricultural produce rose to 12.67% from 12.38% recorded in February 2021.

 

More details shortly…

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Business News

BUA Group, French company announce progress in 200,000 bpd refinery project

This is coming about 6 months after both firms signed an agreement for the supply of process technologies and the design of the facility.

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The BUA Group and Axens, a French-based petroleum technology company, have both signed a progress acknowledgement statement for the proposed BUA multi-billion-dollar integrated 200,000 barrels per day refinery in Akwa Ibom State.

This is coming about 6 months after both firms signed an agreement for the supply of process technologies and the design of the facility.

BUA, while making the disclosure in a statement on Wednesday, April 14, 2021, said that the French President, Emmanuel Macron, commended its Chairman, Abdul Samad Rabiu, for his commitment to developing lasting relationships between French and Nigerian businesses.

READ: What the $1.5 billion Port Harcourt refinery deal means to us – Maire Tecnimont

The statement said that this came as the French Minister for Foreign Trade and Economic Attractiveness, Franck Riester, paid a visit to the BUA Group Headquarters in Lagos where he handed over a personal invitation from Macron to Rabiu to attend the Choose France Summit in June in Paris representing business leaders from Nigeria and Africa.

The French minister also witnessed the signing of a progress acknowledgement statement between BUA Group and Axens of France for the proposed refinery project, according to the statement.

The statement also said that during the visit, it was announced that the BUA chairman had been appointed Chairman of the France Nigeria Investment Club.

READ: FG reacts to reports of revoking 32 refinery licenses

Sigma Pensions

While thanking the minister and Macron for their unwavering support in bringing BUA and French businesses together, Rabiu said BUA had so far initiated partnerships and had developed personal relationships with a few French businesses, including Axens.

He expressed confidence in the quality of expertise and technical know-how of the French companies BUA had partnered with.

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Rabiu pointed out that the BUA refinery would reduce the huge cost of transporting Nigerian crude offshore, refining it and bringing it back into the country when fully operational.

READ: Abdulsamad Rabiu’s stake in BUA Cement has increased by N1.2 trillion in value since listing in 2020

He said that the choice of Akwa Ibom for the refinery was due to the huge availability of raw materials and its proximity to export petroleum products to regional countries.

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The President of Axens, Jean Sentenac, in his statement, said he was pleased that the project was advancing on schedule and expressed delight for the very good cooperation between all the involved parties, reiterating the commitment of Axens in delivering the BUA Refinery Project on time and with the highest standards.

READ: FG to open LPG distribution channels in all local governments

Bottom line

The completion and take-off of the refinery owned by the BUA Group would come as a huge boost for the Federal Government’s effort to stop the importation of refined petroleum products, ensuring that the country becomes a net exporter of these products.

This will also help to conserve the scarce foreign exchange as the completion and take-off of the Dangote refinery and other similar refinery projects will help ensure self-sufficiency in the country.

The BUA Group, just a few days ago, was listed as one of the companies with an active refinery license from the Department of Petroleum Resources (DPR).

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