In a recent interview, held on the sidelines of the IMF/World Bank meetings held in Washington, Diamond Bank Chief Executive Officer (CEO) Uzoma Dozie speaks on a wide variety of topics including the nomination of Aishah Ahmad as Central Bank of Nigeria (CBN) Deputy Governor, why the bank will be focusing on retail lending, and selling its stake in branches outside the country in the near future.
If you look at our strategy and where we are going to, which is purely retail, it means that with those big transactions we have been doing in the past, we would not be there. And if we are going to do big transactions, it would be participatory from a syndication perspective. Also, our focus is going to be more on Nigeria than beyond Nigeria’s border.
Likely reason for the change in focus
Diamond bank has also written off over N100 billion in bad loans in the past two years, suggesting its previous lending strategy was not effective. Many banks are currently struggling with several of these transactions that occurred in the oil and gas space as well as manufacturing, leading to them impairing (writing off) these loans or extending repayment periods. Nigeria is the key market.
Dozie, also stated that the bank was looking at selling its branches outside the country.
We are focusing on Nigeria. If anyone is interested in those assets, we would consider it. The good thing about our assets is that they are all profitable. You just need to weigh the offer with the value.
Why this makes sense
Foreign operations have continued to play a minor role for Nigerian banks, with the exception of UBA whose operations ex Nigeria contribute about 30% to its bottom line.
How will proceeds from the asset sale be used?
Diamond bank, intends using proceeds from its asset sale to meet capital adequacy requirements. In addition to selling off stakes in branches outside the country, the bank had recently announced its intentions to dispose of non-core assets in Nigeria. Several banks in the country including Zenith bank, and Fidelity had recently raised Eurobonds for general banking purposes.
