Banking
Diamond Bank Scores High in H1
The H1 2016 performance scorecard of Diamond Bank Plc on the floor of the Nigerian Stock Exchange (NSE) has been released and it shows a considerable growth in key financial parameters.
Analysts and industry watchers had, because of the harsh macroeconomic outlook, forecasted sluggish growth and greyed result for the period, but the interim report and accounts of the bank for the first six months of the year surpassed industry expectations as total comprehensive income rose by 13.3 per cent year on year to N16.3 billion as against N14.4 billion recorded in comparable period of 2015.
Non-interest income surged by 33.4% to N26.5 billion, reflecting the successful efforts targeted at improving this income line and also the focused strategy of management, which were sharpened at improving digital functionality and widening financial inclusion.
Profit Before Tax (PBT) remained modest and stable at N10.5 billion while Profit After Tax (PAT) stood at N9.1 billion, thus meeting shareholders’ expectation for the period under review and showcasing the strategic strength of the management creatively configured to surmount the turbulent macroeconomic environment and the tough regulatory framework facing the financial services sub-sector.
The Bank improved on its credit creation by 28.6 per cent as loans and advances to customers grew from N763.6 billion in the same period last business year to N982.3 billion. Also, loans to other banks jumped by 30.7 per cent to N78.5 billion in H1 2016 from N60.1 billion in the corresponding period last year, while its retail customers grew to over 13 million with 7 million of these opening accounts in the last 2 years.
Also, the Banks digital leadership in the financial services sub-sector gained ascendency as its Diamond Mobile Apps usage increased from 1.6 million to 5.1 million while volume increased from 1.3 billion to 5.5 billion year on year.
The Bank sustained a strong top line growth with the asset base surging to N1.970 trillion from N1.753 trillion in the same period last year, representing 12.4 per cent increase.
Commenting on the Bank’s H1 performance, Uzoma Dozie, Chief Executive Officer stated that despite the economic headwind, the Bank would remain resilient and sustain the positive growth throughout H2.
According to him, the Bank’s strong liquidity and capital adequacy ratios plus its digital transformation have rightly positioned it to meet customer obligations and offer service deliveries that are beyond banking.
He said: “With the domestic economy contracting, the Nigerian banking industry has faced a number of challenges over the last six months.
Nevertheless, in the first half of 2016, we have remained resilient in weathering these headwinds and there are real bright spots in our income streams, as well as noteworthy cost reduction, which gives us confidence going into the second half of the year.
Due to actions taken and an ongoing prudent approach, our regulatory capital remains strong. This position of strength helped offset the one-off impact of the recent devaluation of the naira, as acknowledged by Fitch Ratings when they affirmed our B rating with a stable outlook. Liquidity of the bank also remains high and is well above the guidance ratio stipulated by CBN.
Although year on year impairment charge grew by 45.6 per cent to N19.0 billion, reflecting the Bank’s continuation of prudent provisioning, which is aimed at strengthening performance in the years ahead; its operating costs and interest expense are shrunk by 10.7% and 27.5% respectively compared to H1 2015, reflecting success of the cost control initiative and low cost deposit strategy.
Speaking further, Dozie stated that despite the catalogue of challenges facing the sub-sector, which were exacerbated by the recent devaluation of the naira and foreign exchange scarcity, culminating in backlog of unpaid salaries and wages for individuals, Diamond Bank has continued a diligent implementation of its focus on curtailing cost.
According to him, this has resulted in 10.7% reduction in operating expenses and 3.8% drop in employee benefit expenses for the period under review.
The Bank also integrated further its retail offering and the supporting infrastructure with the opportunities created by its value chain marketing approach in the corporate and business banking segments.
“In the last few months, evidence has shown that the new strategy and initiatives to curtail costs are proving successful and are reflected in the bank’s financial indicators. This is reassuring. Year on year, costs came in lower and as we conclude the organizational restructure, we expect to harvest more savings from operational and employee expenses.
The primary benefits of this however are the resources that we have freed up to provide improved services to customers. Having done this, we are optimistic that the Bank is in the right markets and has the wherewithal to excel and create value for shareholders in the long run,” stated Dozie.
By Adedapo Adesanya
Access Bank Plc, the banking subsidiary of Access Holdings Plc, has entered into a binding agreement with South African-based Bidvest Group Limited for the acquisition of 100 per cent equity stake in Bidvest Bank Limited.
The deal for the 24-year-old South African lender is due to be completed in the second half of 2025, upon regulatory approval.
This shows Access Bank’s further expansion plans in line with goals set by its late founder, Mr Herbert Wigwe.
The agreement to acquire 100 percent stake in Bidvest Bank reflects Access Bank’s commitment to strengthening its footprint in South Africa and consolidating on its position as the continent’s gateway to global markets as it seeks to optimise the benefits of recent acquisitions and accelerate its transition towards a greater focus on efficiencies.
Bidvest Bank, founded in 2000 is a niche and profitable South African financial institution providing a diverse range of services, including corporate and business banking solutions and diverse retail banking products.
As of its year ended June 2024, Bidvest Bank reported total assets equivalent of $665million and audited profit before tax of $20million.
Upon conclusion of this acquisition, Bidvest Bank will be merged with the bank’s existing South African subsidiary to create an enlarged platform to anchor the regional growth strategy for the SADC region.
This is coming just as the bank opened a new branch in Malta as part of efforts to focus on international trade finance after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
The Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
By Adedapo Adesanya
The International Finance Corporation (IFC) and Goldman Sachs have announced a new partnership with African banks, including Nigeria’s Zenith Bank and Stanbic IBTC Nigeria to support the Goldman Sachs 10,000 Women initiative, a joint programme launched in 2008 to provide access to capital and training for women entrepreneurs globally.
The two Nigerian banks are part of nine financial institutions from across Africa which have agreed to join the 10,000 Women initiative committing to leverage the business education and skills tools the programme provides to create more opportunities for women entrepreneurs across the continent by providing access to business education.
Others banks include Stanbic Bank Kenya, Ecobank Kenya, Ecobank Cote d’Ivoire, Equity Bank Group, Banco Millenium Atlantico – Angola, Baobab Group, and Orange Bank.
Speaking on this, Ms Charlotte Keenan, Managing Director at Goldman Sachs said – “10,000 Women has had a powerful impact to date, but we know that there are more women to reach and more potential to be realized.
“We are delighted to partner with IFC to supercharge the growth of women-owned businesses across Africa, and mainstream lending to female business leaders. We remain committed to supporting entrepreneurs with the access to education and capital that they need to scale.”
Since 2008, the 10,000 Women initiative has provided access to capital and business training to more than 200,000 women in 150 countries.
“This expanded initiative marks a significant step forward in creating equitable economic opportunities for women in Africa, enabling them to build stronger, more resilient businesses and to realize their entrepreneurial goals,” said Ms Nathalie Kouassi Akon, IFC’s Global Director for Gender and Economic Inclusion.
Goldman Sachs’ 10,000 Women initiative complements the Women Entrepreneurs Opportunity Facility (WEOF), launched in 2014 by Goldman Sachs and IFC as the first-of-its-kind global facility dedicated to expanding access to capital for women entrepreneurs in emerging markets.
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