Facts have emerged on the reasons for the sudden resignation of some Directors of Diamond Bank Plc.
According to Reuters, the resignation was to pave the way for new investors to recapitalise the bank.
The bank had in a notice sent to the NSE announced the resignation of several non-executive directors. They are:
- Mr. Oluseyi Bickersteth
- Mr. Rotimi Oyekanmi
- Mrs. Juliet Anammah
- Mrs. Aisha Oyebode
The race for additional capital
The bank has been trying to raise fresh capital after huge loan losses worsened by an economy that has just recovered from a recession. The economic crisis turned a once lucrative oil sector loan book sour with several banks looking for new avenues to make money.
According to some industry watchers, the bank is in dire need of new capital to fuel growth and profitability. It is thought that the new investors are in global financial services and are said to be ready to wake up the sleeping giant and talks may have reached an advanced stage with the resignation of the four directors.
The bank revealed that the sale was in line with the bank’s objective of streamlining its operations and focus its resources on the immense opportunities in Nigeria’s retail banking market. It had earlier announced its divestment from the West Africa business, Diamond Bank S.A. for 61 million Euros to Manzi Finances S.A in November 2017.
In its full year 2017 financial results 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.
While in its H1 2018 financial statements for the year ended 30 June 2018, it recorded a gross earnings of ₦98.5 billion for the period ended June 2018 compared to ₦97.9 billion reported for the period ended June 2017. This represents 1% increase year on year. The bank’s profit after tax for the half year ended 30th June 2018 was ₦1.80 billion, a 78% decrease compared to profit of ₦8.02 billion recorded in H1 2017.
Currently, most Nigerian banks face stiff competition from rapidly growing financial technology firms that are undercutting a sizable portion of the payments market in the country.
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).