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Diamond Bank’s Solvency Crisis Will Further Worsen—Moody’s Warns

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**Downgrades Bank’s Ratings

By Dipo Olowookere

The baseline credit assessment (BCA) and adjusted BCA of Diamond Bank Plc have been downgraded from caa3 from caa1 by Moody’s Investors Service.

In a statement obtained by Business Post, the foremost global rating agency explained that the action was as a result the Nigerian lender’s weakened solvency, governance tensions and foreign currency liquidity challenges.

“In Moody’s view, the bank will face a further deterioration of its solvency that will likely undermine investor confidence and make foreign currency funding increasingly costly and difficult to access, or the bank will receive external capital support from either existing or new shareholders, or from the government, boosting its solvency and addressing its foreign currency vulnerability,” the statement said.

On the downgrading of the ratings, the statement noted that, “The primary driver for the two-notch downgrade of Diamond Bank’s BCA to caa3 is Moody’s view that the lack of progress in resolving NPLs adds pressure on its already weak solvency profile,” the statement said.

Also, the rating firm downgraded Diamond Bank’s long-term local currency and foreign currency deposit ratings to Caa1 from B3.

The rating agency placed the deposit and other senior ratings and assessments on review with direction uncertain.

Diamond Bank’s Not Prime (NP) short-term local and foreign currency deposits and counterparty ratings and NP(cr) short-term counterparty risk assessments have been affirmed, Moody’s said.

“Moody’s action follows the departure of Diamond Bank’s chairman of the board and three other non-executive board members, and the subsequent announcement of the bank’s third quarter financial results which showed a lack of progress in reducing problematic exposures, in contrast with the improvements that the rating agency had expected.

“The downgrade reflects Diamond Bank’s (1) weak solvency that is characterised by low provisions set aside for its high level of non-performing loans (NPLs) that outsize its tangible common equity (TCE), (2) corporate governance tensions that will likely divert management’s focus from resolving NPLs and could potentially undermine investor confidence, and (3) vulnerable foreign currency repayment obligations in 2019,” the statement said.

It further said the placement of the ratings on review reflects potential for diverging outcomes for Diamond Bank.

Moody’s said its previous assignment of a positive outlook on Diamond Bank’s deposit ratings in June 2018 had been based on expectations of substantial NPL reduction in the following 12 months; however, Moody’s said it now expects NPLs and provisioning needs to remain high.

Diamond Bank’s NPLs ratio stood at about 40 percent of gross loans as of September 2018 from 42 percent at year-end 2017, and only about 20 percent of the NPL stock is covered by provisions. Moody’s estimates that the provisioning requirements currently outsize the bank’s TCE.

“A second driver for the downgrade is the weakened corporate governance of the bank, following the recent unexpected departure of the bank’s chairman and three members of the board of directors. This development reveals tensions that the rating agency expects will delay the resolution of the bank’s large portfolio of NPLs and could potentially undermine investor confidence in the ability of the bank’s management to turn around Diamond Bank’s financial performance.”

A third related factor for the downgrade is Diamond Bank’s vulnerable foreign currency funding profile. The rating agency views the risk that the weak solvency and corporate governance tension may erode customer and depositor confidence, further impairing the bank’s financial performance and negatively affecting Diamond Bank’s funding profile.

“The bank will face significant refinancing needs in the first half of 2019, including a $200 million Eurobond maturing in May 2019.

“Diamond Bank’s liquid foreign currency assets at year-end 2017 amounts to about 25 percent of the debt and borrowings that are maturing in 2019, and the bank is currently looking at various market options to meet its foreign currency funding needs,” the rating firm said.

Moody’s said counterbalancing the aforementioned negative factors, it believes there is a high probability of government support for Diamond Bank, in case of need, reflecting the bank’s designation as a Domestic Systemically Important Bank in Nigeria and its large retail client base of about 10 million clients.

“Diamond Bank’s Caa1 long term deposit and issuer ratings benefit from a two notch support uplift from the bank’s BCA of caa3,” it said.

It said the review on Diamond Bank’s Caa1 deposit ratings will focus on the lender’s ability to address its solvency and foreign currency challenges.

The rating agency said it will assess the likelihood of some of the lenders converting their convertible debt to equity, or the bank raising new capital externally through other means, including any possible takeover.

In addition, Moody’s said it will assess any financing structures and plans that Diamond Bank will put in place in order to boost its foreign currency liquidity, balanced against any deterioration of its foreign currency resources, including any foreign currency deposit outflows.

“During the review period, Moody’s will also monitor steps taken by the bank’s shareholders to strengthen corporate governance, including the potential for Diamond Bank to appoint non-executive and independent directors that will meet the Central Bank of Nigeria’s (CBN) approval,” it ended.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via [email protected]

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Access Bank Commits to Keeping Wigwe’s Vision on Death Anniversary

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Profile of Herbert Wigwe

By Adedapo Adesanya

Nigerian financial services institution, Access Bank Plc, has pledged to carry on the value and visions of its late chief executive, Mr Herbert Wigwe, who died one year ago in a helicopter crash in the United States.

Mr Wigwe, his wife Doreen, and son, Chizi alongside Mr Abimbola Ogunbanjo, the former group chairman of Nigerian Exchange (NGX) Group Plc also died in the crash in 2024.

The chopper, a Eurocopter EC 130, crashed near Nipton on February 9, 2024, on the edge of the Mojave Desert Preserve, when heading to Las Vegas where the victims were going to watch the Super Bowl.

The ill-fated helicopter left Access Bank without its visionary leader and the Herbert Wigwe family without their parents and brother and the Ogunbanjo’s without their patriarch.

In a post on X, formerly Twitter, the institution said, “Today marks one year since the world stood still for us. On this day, we lost Herbert, Doreen, and Chizi—three remarkable souls who left an indelible mark on our lives and our hearts.

“One year later, we still feel the void, but we also feel the weight of their legacy—one that challenges us to be better, do better, and strive for greatness.

“As we reflect, we carry forward the values they instilled and honor their memories by walking the path they paved for us.”

Access Corporation is headquartered in Lagos, Nigeria and operates through a network of more than 600 branches and service outlets, spanning three continents, 18 countries, and 50+ million customers managed by over 28,000 employees. Access Bank, the corporation’s banking business, is one of Africa’s largest retail banks by customer base and total assets.

For eight years until May 2022, Mr Wigwe led Access Bank Plc as its chief executive through an extraordinary growth period. Some of the accolades accorded him included Banker of the Year, 2020 by Leadership Awards; African Banker of the Year, 2021 by African Banker Award; and Best Banking CEO, 2021 by Global Brands Magazine Awards.

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Advans Nigeria Appoints Odetayo as Deputy Chief Executive Officer

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Elizabeth Odetayo

By Modupe Gbadeyanka

To improve operational efficiency, Advans La Fayette Microfinance Bank has appointed Mrs Elizabeth Odetayo as the new Deputy Chief Executive Officer.

She will work closely with the Chief Executive Officer, Mr Gaetan Debuchy, and the executive team to drive the bank’s strategic initiatives, optimize operational performance, and expand its reach to empower more individuals and businesses with access to tailored financial solutions.

Before her new appointment, she served as the Chief Financial Officer (CFO) of Advans La Fayette Microfinance, where she played a pivotal role in shaping the bank’s financial strategy, ensuring robust fiscal management, and supporting its mission to provide inclusive financial services to underserved communities.

A statement from the financial institution disclosed that the appointment of Mrs Odetayo became effective Saturday, February 1, 2025.

She is expected to bring her over 20 years of wealth of experience and a proven track record of excellence in the financial services sector to her new role.

“This strategic appointment underscores the bank’s commitment to fostering leadership from within and strengthening its executive team to drive continued growth and innovation,” a part of the statement read.

Mrs Odetayo has demonstrated exceptional leadership, strategic vision, and a deep understanding of the microfinance industry.

Her expertise in financial management, risk assessment, and operational efficiency has been instrumental in advancing the bank’s objectives and enhancing its impact on clients and stakeholders.

Commenting on the appointment, Mr Debuchy said, “Elizabeth’s appointment as Deputy CEO is a testament to her dedication, expertise, and outstanding contributions to our bank.

“Her deep understanding of our operations and her commitment to our mission position her to help steer the bank toward achieving its strategic goals.

“We are confident that her leadership will further strengthen our ability to deliver impactful financial services to our clients.”

In her reaction, Mrs Odetayo said, “I am honored to take on this new responsibility and to continue contributing to the growth and success of the bank.

“I look forward to collaborating with our talented team to drive innovation, enhance customer experience, and expand our reach to create lasting value for the communities we serve.”

Advans La Fayette Microfinance remains committed to its mission of fostering financial inclusion and empowering individuals and businesses through accessible and sustainable financial solutions.

The appointment of Mrs Odetayo as DCEO marks an exciting new chapter in the bank’s journey toward achieving its vision.

Her promotion and over 130 staff in 2024 is a demonstration of the bank’s commitment to empowering its employees, fostering a culture of excellence, and driving productivity against all odds. By investing in internal talent, Advans continues to build a strong, motivated workforce that is equipped to deliver on its mission and vision.

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NIBSS Upgrades NQR Payment to Reduce Cash Dependency

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NQR payment

By Adedapo Adesanya

The Nigeria Inter-Bank Settlement System (NIBSS) has unveiled significant upgrades to its Nigeria Quick Response (NQR) payment system.

The mechanism is designed to reduce cash dependency and streamline and enhance digital transactions for businesses and individuals across Nigeria.

The NQR payment system, launched in March 2021, is part of Nigeria’s broader push to promote cashless transactions across the country.

The system allows customers to make payments by scanning a QR code, which redirects them to their bank or mobile wallet to complete the payment. It is also timely and avoids delays.

Speaking on the development, Mr Premier Oiwoh, MD/CEO of NIBSS, emphasized the evolving capabilities of NQR and how it is poised to revolutionize payments, transactions are processed instantly, ensuring immediate settlement.

“This account is the only QR in the world that is instant for the beneficiary,” he said.

He noted that the system is also far more robust, offering smoother and more secure transactions. It now supports both Person-to-Person (P2P) and Entity-to-Person (E2P) payments, significantly expanding its use cases.

“Beyond the P2P, there is also E2P on the MQR, and most of the bank apps have it today.

“My dream is to have hawkers on the streets being able to present their QR in the form of an ID card and then make payment. Cash cannot be everywhere, what we are all looking for is payment” he said.

“You can also send your personal QR code to anybody to pay you rather than send an account number,” he said

Mr Oiwoh announced that a new pricing structure for NQR payment will take effect on March 1, 2021.

The use of QR codes is expected to significantly reduce Nigerians heavy reliance on cash, thereby contributing to the digital economy infrastructure and financial inclusion agenda of the Central Bank of Nigeria (CBN).

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