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Diamond Bank to Complete Sale of UK Subsidiary in Q4, Return to Profitability—CEO

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Diamond Bank to Complete Sale of UK Subsidiary in Q4, Return to Profitability—CEO

By Modupe Gbadeyanka

Chief Executive Officer of Diamond Bank Plc, Mr Uzoma Dozie, has revealed that the sale of the company’s subsidiary in the United Kingdom would be finalised in the fourth quarter of 2018.

Mr Dozie made this disclosure while reacting to the third quarter financial statements of Diamond Bank released last week.

According to the bank executive, this and other actions to be taken by the lender should lead the firm to profitability in the fourth quarter.

“As we move into the final quarter of the year, we expect headwinds to continue driven by emerging situations in developed economies as well as our domestic political realities.

“Despite this, our investors can expect a further decline in Non-Performing Loans (NPLs), a further increase in our digital footprint and completion of the sale of the UK subsidiary.

“Through these actions, we remain optimistic about the medium to long term outlook of Diamond Bank and its return to strong profitability,” Mr Dozie was quoted as saying in a statement issued last week by bank’s PR agency, Prize Communications Limited, which was obtained by Business Post.

Earlier this year, Diamond Bank Plc struck a deal with British industrialist, Mr Sanjeev Gupta, for the 100 percent sale of its UK branch after selling its West African subsidiaries in 2017.

According to Diamond Bank, it was committed to pursuing a quick completion of the transaction with GFG Alliance subject to approval of the Financial Conduct Authority and Prudential Regulation Authority, which regulate banking business in the UK.

The lender had noted that the sale of its international subsidiaries was not expected to cause service disruptions for customers located around the world as they could continue to enjoy enhanced and convenient banking services through its digital channels.

In August this year, Mr Dozie had said the transaction was already in the change of ownership process, assuring that the exercise would be finalised before the end of the year.

In May 2018, Diamond Bank posted a 2017 loss, its first time in the red in six years after selling assets to conserve capital and to focus on its home market.

Its half-year 2018 pre-tax profit declined 69 percent to N2.92 billion.

In its Q3 results, the financial institution’s profit before tax dropped to N3.1 billion from N4.8 billion, while the profit after tax depreciated to N1.7 billion from N3.9 billion.

Also, the gross earnings for the period under consideration dropped to N142.5 billion from N143.7 billion, with the interest and similar income going down to N108 billion from N112.5 billion a year ago, while the net interest income depreciated to N67.1 billion from N77.7 billion.

In addition, customer deposit dropped by 8 percent year-on year to N1.107 billion due to re-pricing and non-rollover of high priced maturing deposits, and migration to government securities.

According to the CEO, these results were affected by the challenging environment operated in the period under review.

“The global economy is currently witnessing a shift in trade relations alongside continued interest rate adjustments. This has led to greater volatility across markets and increasingly fragile economies.

“Nigeria’s economy has not been immune to certain headwinds, so that while the economy recorded quarters of expansion, the rate of growth has weakened. However, against this backdrop, our digital-led retail strategy has remained robust.

“Through this strategy we have been able to continue scaling up by reaching a wide pool of customers both cost effectively and efficiently.

“As a result of our network and digital infrastructure, during Q3 we reached the N1 billion mark in total loans disbursed to Small and Medium Enterprises (SMEs).

“Alongside this, we introduced the SMEzone, a platform targeted at keeping entrepreneurs well positioned for competitiveness through community and continuous learning.

“We are investing more in businesses in the middle market because we see entrepreneurs as a key driving force for economic growth. This focus is in line with and supportive of our own recovery and return to profitability,” Mr Dozie said in the statement.
Last week, there were reports that some investors were interested in Diamond Bank, but the mid-tier bank said since refuted the speculations.

Business Post reports that shares of Diamond Bank were traded at the Nigerian Stock Exchange (NSE) on Wednesday at N1.45k, already rising by 4.32 percent.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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Banking

Africa Finance Corporation Unveils $2bn Credit Facility for Banks

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credit facility

By Adedapo Adesanya

In the wake of global crises including the COVID-19 pandemic and more recently the Russia-Ukraine conflict, Africa Finance Corporation (AFC) has announced the launch of a $2 billion facility to support bank-driven economic recovery in Africa, and the resilience of African economies.

AFC has committed to funding up to 50 per cent of the credit facility and mobilizing the rest through its network of international partners and investors.

The facility, dubbed African Economic Resilience will be disbursed via loans from AFC to select commercial banks, regional development banks and central banks in various African countries, providing them with much needed hard currency liquidity to finance trade and other economic activities in their various jurisdictions.

These institutions will be able to leverage AFC’s proven access to global funding to access financing at competitive rates.

Speaking on the rationale behind the launch, Head of Treasury and Financial Institutions, Mr Banji Fehintola said, “The COVID-19 pandemic set back Africa’s economic growth trajectory and further widened the trade financing gap. Before the continent could get over that, the Russia-Ukraine conflict has brought with it a new set of challenges, which have the same effect of negatively impacting growth prospects across the continent.

“As such, we are determined to play a leading role in shaping the continent’s recovery and resilience, not only through the work we do in bridging Africa’s infrastructure gap but also through targeted interventions such as this $2billion COVID-19 economic resilience facility.”

Applications for the African Economic Resilience facility will open at a yet to be announced date and will be accessible through AFC’s website. Through this funding intervention, the firm will accelerate its developmental impact in Africa, driving the continent to a new phase of growth that is focused on maximum resource value capture and domestic job creation.

Over the last 15 years, AFC has built experience mobilizing global capital for critical infrastructure projects in Africa with several bond issuances in the last two years, including a 10-year $500 million Eurobond in 2019, a 5-year $700 million Eurobond in 2020 and a 7-year $750million Eurobond at its lowest yield in 2021.

Recently, an independent asset management arm, AFC Capital Partners was established with plans to raise $2 billion to fund climate adaptation infrastructure projects in Africa.

It is this same fund mobilization experience that AFC will leverage to support COVID-19 economic recovery in Africa through the Rebuilding Economic Resilience facility.

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Banking

Heritage Bank’s Osepiribo Ben-Willie Wins EveAfrique Award

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Osepiribo Ben-Willie

By Modupe Gbadeyanka

An executive at Heritage Bank Plc, Ms Osepiribo Ben-Willie, has been given a Heart of Gold award at the annual Red Ball for Charity organised by EveAfrique.

The banker, who is the Directorate Head of South-South, South-East & Private Wealth Management at Heritage Bank, was part of the 10 awardees recognised for her immense contribution to the sustainable development and socio-economic growth in the Niger Delta region.

Ms Ben-Willie stated that Heritage Bank has been at the forefront of investing in human capital development for critical economic recovery. This, according to her, informed the keen interest in extending support to the Niger Delta region.

Specifically, she commended the organisers of the event for the award and on the need to raise awareness in addressing a peculiar health matter about Lupus signs and symptoms which happens not to be known by many individuals.

“In Heritage Bank, health is a priority, that is why we will continue to partner and support the organizers of EveAfrique on knowledge increase about the importance of early detection and treatment, enhancing the self-management skills of people with lupus, and improving the capacity of health care providers in their ability to make quick and accurate diagnoses,” she said.

Ms Ben-Willie disclosed the bank’s commitment to supporting one of the survivors of Lupus, Boma Alaiyiboba Graham-Douglas’s foundation, whilst stating that the lender has been at the forefront of addressing health matters through several partnerships with state governments and NGOs.

In her keynote address, the Convener of EveAfrique of Red Ball for Charity initiative, Ms Ivy Davis Etokakpan, said that her organisation in partnership with Heritage Bank has synergized to create significant awareness and support for individuals affected by the disease.

She further stated that the Heart of Gold award was presented in appreciation of well-deserved distinguished persons who have made notable strides in the areas of protection and respect for human rights, peaceful settlement of disputes, sustainable development to socio-economic growth in the Niger Delta region.

The 2022 EveAfrique’s Red Ball for Charity was themed A Night of Hope with focus on Lupus Awareness and Management and had several persons in attendance.

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Banking

Nigeria’s Financial Inclusion Rate Almost at 70%—CBN

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financial inclusion rate

By Aduragbemi Omiyale

The financial inclusion rate in Nigeria is almost at 70 per cent, the Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has disclosed, expressing optimism that the 85 per cent target would be achieved within a very short period.

Speaking in Abuja on Monday, Mr Emefiele said the introduction of the eNaira last year will speed up the rate of financial inclusion by enhancing the relationship between mobile banking and e-business.

Yesterday, the apex bank chief received a delegation of Executive Directors from the Bank of Uganda (BoU), who were on an experience sharing tour of the Central Bank Digital Currency (CBDC) project of the CBN.

The team comprised Executive Director and Economic Adviser to the Governor, BoU, Dr Jacob Opolot;  the Executive Director, Information Technology, BoU, Mr Richard Mayebo; Executive Director, Finance, BoU, Mr Richard Byarugaba; and the Acting Director, National Payments Systems Department, Mr Andrew Kawere.

While addressing his guests at the bank’s head office in Abuja, Mr Emefiele noted that the CBN was committed to accelerating the rate at which those who were financially excluded could come into the formal banking sector.

He said the eNaira has recorded some level of success judging by the rate of integration and security features, adding that the digital Naira was attracting from other countries and multinational bodies such as the International Monetary Fund (IMF) and the World Bank.

According to him, this underscored the level and quality of work the CBN had put into the project, though he noted that Nigeria, being the first country in Africa to launch its CBDC, was a case study to other climes, the country was treading cautiously to ensure it sustains the successes recorded thus far.

While equally stressing that the country had deepened its payment system infrastructure, which he noted was ranked among the best in the world, Mr Emefiele paid tribute to his predecessor in office, Mr Sanusi Lamido Sanusi, for laying the foundation upon which the country’s current payments system was built.

He recalled that Mr Sanusi, as then CBN Governor, appointed him chairman of the sub-committee of the Bankers’ Committee to lead the payments system drive in 2012, adding that the move paved the way for innovative ideas that eventually led to the creation of the eNaira.

He, therefore, charged the Executive Directors (the equivalent to CBN Deputy Governors) of the Bank of Uganda to strive to strengthen their country’s payment system, noting that a strong payment system remained the bedrock for the successful take-off of a CBDC.

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