News Column

Diamond Bank Seeks Approval to Float U.S.$400 Million Rights Issue

May 22, 2014

Nume Ekeghe With Agency Report

Diamond Bank Plc is seeking regulatory approval to raise between $300 million and $400 million via a rights issue from existing shareholders. The bank's Chief Finance Officer, Mr. Abdulrahaman Yinusa, disclosed this to Reuters yesterday.

"We are in the process of filing with the relevant regulatory authorities for a rights issue, which we expect to be concluded by third quarter, Yinusa said.

The mid-tier lender raised $200 million in a debut Eurobond last week, short of its target of between $300 million to $350 million.

Diamond Bank's share price dropped by 2.58 per cent to N6.42 per share on the Nigerian Stock Exchange (NSE) yesterday. The shares are down 10.3 per cent this year.

Diamond Bank had won shareholder approval in April to raise fresh capital in debt and equity. The bank is seeking to raise $500 million in its quest to increase its tier-2 capital to $750 million. It is targeting a capital adequacy ratio of over 20 per cent of assets after the capital injection, from around 17 per cent presently.

The bank's Group Managing Director/Chief Executive Officer, Mr. Alex Otti, had expressed delight over the level of subscription the Eurobond received.

"The successful issuance of the Eurobonds is yet another milestone in the growth trajectory of the bank.

"Three years ago, we embarked on the task of transforming Diamond Bank into a leading player in the Nigeria banking industry and having moved four positions from the 11th largest bank in terms of total assets size to sixth, we are quite convinced that we are on the right path," the Diamond Bank boss had said.

According to him, the success of the issuance of the dollar-denominated note has effectively launched Diamond Bank into the international market. He said the bank would continue to tap from the opportunity in a phased manner.

Diamond Bank Plc's audited full year results for 2013 showed that the commercial bank continued on the path of growth.

For instance, the bank's gross earnings was up by 30.4 per cent from N138.8 billion to N181 billion in the year under review.

In addition, the bank's profit before tax and profit after tax also advanced 16.7 per cent and 29.1 per cent, from N27.5 billion and N22.1 billion respectively in 2012 to N32.1 billion and N28.5 billion at the end of 2013.

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Source: AllAfrica