Following the approval given by the shareholders, the Chief Finance Officer of
The bank last Friday filed the application with the NSE for a rights issue of 8,685,145,863 ordinary shares of 50 kobo each at N5.80 per share. This will fetch the bank N50.373 billion (over
Reacting to the development, analysts at Chapel Hill Denham said if the rights issue is successful, N50.374 billion will be added to the bank's Tier-1 capital.
"In this case, we estimate that Diamond's Capital adequacy ratio (CAR) will rise to 23.8 per cent from 17.3 per cent in full year of 2013. The issue will imply a lower full year 2014 estimate earnings per share of N1.29 versus of our forecast of N2.06 and an return on average equity (ROAE) of 16.9 per cent versus our 19.8 per cent forecast.
"It also implies a deposit to asset ratio of 79.2 per cent in full 2014 estimate versus 81.5 per cent previously.
"On a positive note, we see the potential for an immediate utilisation of the added capital in lending to the bank's focus sectors and segments. We estimate an full year 2014 estimate loan to deposit ratio of 58.5 per cent for Diamond, below our coverage average of 60.3 per cent.
"The potential EPS dilution may therefore be reversed in the short term by greater earnings," they said.
The bank intended to raise
Assessing the successful
"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
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