Banking
Fitch Downgrades Diamond Bank over Solvency, Liquidity Risks
By Dipo Olowookere
Fitch Ratings has announced downgrading the Long-Term Issuer Default Rating (IDR) of Nigeria’s Diamond Bank Plc to ‘CCC’ from ‘B-‘.
In a statement on Friday, Fitch said it has also lowered the bank’s Short-Term IDR to ‘C’ from ‘B’ as well as the National Long-Term Rating, which was dropped to ‘B(nga)’ from ‘BB+(nga)’.
The rating agency said the two-notch downgrade of Diamond Bank’s Long-Term IDR reflects uncertainty over its solvency and liquidity in view of very weak asset quality, highly vulnerable capital position as well as tight foreign currency (FC) liquidity ahead of an upcoming maturing $200 million Eurobond in May 2019.
The bank has some contingency plans, such as the sale of its UK subsidiary, but execution may be challenging, especially considering the recent resignation of four board members, it said.
In a statement, Fitch said Diamond Bank’s IDRs are driven by its standalone credit profile, as defined by its Viability Rating (VR).
It noted that the lender’s VR is highly influenced by very weak asset quality, which renders its capital position highly vulnerable to any further deterioration, with the VR also reflecting limited FC liquidity.
In the statement, Fitch said Stage 3 loans under IFRS 9, including past due not impaired, which better captures asset quality in our view, accounted for a very large of 37 percent of gross loans at end-1H18, compared with a reported impaired loans ratio (under IAS39) of 13 percent for the same period.
Diamond Bank’s stage 2 loans were a further 23 percent of gross loans, mostly comprising restructured loans. Diamond Bank has the highest share of problem loans (total stage 2 and stage 3 loans as a proportion of gross loans) among Nigerian rated banks, it said, adding that loan loss allowance cover is very low at 19 percent of stage 3 loans.
“We view Diamond Bank’s capital buffers as limited, given very weak asset quality, despite a relatively high Fitch Core Capital (FCC) ratio of 17.5 percent at end-1H18.
“In our view capital remains highly vulnerable given the bank’s low loan loss allowances. Higher reserve coverage would erode considerably the bank’s capital base. Unreserved stage 3 loans were 110 percent of FCC at end-1H18,” the statement said.
Diamond Bank has a small buffer over its 15 percent regulatory total capital adequacy ratio requirement (Total CAR at 16.3 percent at end-9M18).
Fitch said it understands that Diamond Bank has received the approval from the Central Bank of Nigeria (CBN) to obtain a national banking licence, and therefore lower its minimum total capital requirements to 10 percent. However, it stressed that this is subject to the completion of the sale of the UK subsidiary.
Diamond Bank’s FC liquidity improved in 2017, in line with easing FC liquidity conditions in Nigeria. However, FC liquidity remains tight, as Diamond Bank’s FC loans/customer deposits ratio reached 180 percent at end-1H18.
The bank has a number of large bullet repayments due in the short term, including its $200 million Eurobond maturing in May 2019, $100 million from Afrexim due in March 2019, and $70 million from the International Finance Corporation due in July 2019. The bank had about $300 million of liquid assets held as unrestricted cash and cash equivalents and loans to foreign banks at end-1H18.
“We understand that the bank aims to negotiate the refinancing of international financial institution funding, while the improved cash flows from the oil loan book and the disposal of its subsidiary in the UK will be the main contributors to redeeming the Eurobond.
“However, the refinancing has not yet been agreed, while subsidiary disposal has yet to be approved by the Prudential Regulation Authority in the UK and cash flows from the troubled oil sector are uncertain.
“Therefore we see significant execution risk with this plan. Although FC supply has improved, we do not expect Diamond Bank to be able to swap significant volumes of local currency to repay foreign currency obligations,” Fitch said.
Fitch also noted that Diamond Bank’s Long-Term IDR also considers governance shortfalls following the resignation of four members of the board in October 2018, including the chairman (only appointed in 2018) and three non-executive directors, raising questions around effective oversight and ongoing operational capability of the bank. It may also create difficulties in refinancing its obligations with existing lenders.
It said Diamond Bank’s National Ratings reflect its creditworthiness relative to the country’s best credit and relative to peers operating in Nigeria. The Long-term National Rating has been downgraded by several notches due to its weaker credit profile.
“Diamond Bank’s senior unsecured debt has been downgraded to ‘CCC’/’RR4’, reflecting our assessment that average recoveries are a plausible outcome for senior bondholders in the event of a default, albeit this is sensitive to changes in assumptions,” the statement said.
Furthermore, it said Diamond Bank’s Support Rating (SR) and Support Rating Floor (SRF) reflect uncertainty over the ability of the authorities to support banks, particularly in FC.
In addition, there are no clear messages from the authorities regarding their willingness to support the banking system.
“Our view is that senior creditors cannot rely on receiving full and timely extraordinary support from the authorities should a bank become non-viable. Therefore, the SRF of all Nigerian banks is ‘No Floor’ and all Support Ratings are ‘5’,” the statement added.
Diamond Bank’s IDRs are sensitive to any change in its VR. The VR is sensitive to further weakening of precarious asset quality, including a migration of Stage 2 loans to Stage 3 and from further reserving shortfalls of Stage 3 loans, eroding capital.
The VR is also sensitive to any increase in the probability for being able to meet FC obligations. The VR is also sensitive to continuing governance weaknesses stemming from the resignation of four directors, it stated. Fitch said rating upside is unlikely in the short term given the bank’s very fragile financial position. An upgrade of the bank’s VR may result from reduced execution risk in meeting FC obligations or a structural shift in capitalisation, increasing Diamond’s ability to build loan loss allowances, adding that the bank’s National Ratings are sensitive to a change in its creditworthiness relative to other Nigerian issuers.
By Aduragbemi Omiyale
The sum of N427.96 million has been disbursed to more than 1,000 enrollees as surplus by Noor Takaful Insurance Limited and Noor Health Limited.
The payment of surplus is a demonstration of gratitude, accountability, reflection, and celebration of promises made and kept.
At the 2024 Surplus Distribution and Claims Celebration Ceremony in Lagos on Tuesday, August 11, 2026, a total of 22 participants were given surplus payments by Noor Takaful, while 2 enrollees received surplus payments from Noor Health.
Some of the participants that received surplus payments included Jaiz Bank, Lotus Bank, Sterling Bank, The Alternative Bank, Payvantage Limited, Integrated Indigo Limited, Smadac Securities, and Taxaide Logistics.
At the event themed Promise Kept: Celebrating Takaful’s Commitment to Shared Reward, the chairman of Noor Takaful Insurance Limited, Ambassador Shuaibu Ahmed, explained that the company has proven over the years that surplus distribution is not a theoretical concept but a model that works in practice, as evidenced by its consistent payments to participants. He acknowledged that there is growing acceptance of Takaful, as it is increasingly recognised as a credible and established alternative to conventional insurance.
“At Noor, however, we believe it is more than just an alternative. We believe it is a better alternative. We say this because Takaful is built around values that are fundamental to how financial protection should work: equity, fairness, mutual responsibility, transparency, and shared benefit,” he said.
Also speaking at the event, the Vice Chairman of Noor Takaful Insurance Limited, Mr Aminu Tukur, stated that the 2024 surplus distribution was based on the performance of the participants’ risk pool after claims and other obligations had been settled.
Mr Tukur disclosed that the company had grown from a humble beginning of about 60 participants at its inception to approximately 4,000, noting that the company will continue to collaborate with regulators and other stakeholders to promote Takaful and deepen insurance awareness across Nigeria. He added that the company will mark 10 years of operations in 2027.
He explained further that since inception, the company has cumulatively paid N22 billion in claims to beneficiaries/participants, with General Takaful accounting for N7.4 billion and Family Takaful contributing N14.5 billion.
“Our role is to ensure proper management and administration of funds, which includes investments. Secondly, we have a responsibility to ensure that every genuine claim is paid on a timely and stress-free basis,” he stressed.
In his remarks, the chief executive of the National Insurance Commission (NAICOM), Mr Ayo Omosehin, who was represented by the Deputy Director, Insurance, Technical, NAICOM, Mr Usman Jankara, described the payment of surplus to participants as a practical demonstration of the values that define cooperation, shared responsibility, fairness, ethical conduct, and collective prosperity.
He stated that the distribution of surplus by Noor Takaful clearly demonstrates that participants are not merely purchasers of protection but contributors to a system built on cooperation and mutual benefit.
“This has sent a strong message that Takaful can create measurable value while remaining faithful to its ethical foundation,” he added.
Speaking on the recapitalisation exercise for insurance companies recently carried out by NAICOM, he stated that Takaful operators were exempted as they had undergone a similar exercise 4 years ago. According to him, there is no compelling need at the moment for recapitalisation of the Takaful segment of the insurance industry, as all the Takaful operators are well capitalised.
While commending the company for reaching the milestone and promoting participants’ education and engagement, he stressed that NAICOM would continue to support Takaful’s growth while ensuring proper regulatory oversight.
By Aduragbemi Omiyale
The transaction banking capabilities of Stanbic IBTC Bank have been improved with the upgrade of its software to FinnAxia® 9.0.
This was made possible through the collaboration between the financial institution and Nucleus Software, a leading provider of lending and transaction banking solutions.
The milestone reflects more than a decade of collaboration between both organisations in strengthening transaction banking capabilities and delivering enhanced value to corporate and institutional clients.
As customer expectations continue to evolve and businesses increasingly demand seamless, real-time and digitally enabled banking services, Stanbic IBTC Bank and Nucleus Software remain focused on leveraging technology to improve service delivery, enhance operational efficiency and support business growth.
The advancement to FinnAxia® 9.0 enhances Stanbic IBTC Bank’s transaction banking platform, strengthening its ability to deliver integrated payments, collections, liquidity management and cash management solutions.
The upgrade supports greater agility across operations, improves automation and connectivity, enhances digital experiences for customers, and provides a scalable foundation for future growth and innovation.
Across Africa, transaction banking is entering a new phase of transformation as businesses increasingly seek real-time payments, digital trade services, intelligent liquidity management and connected banking experiences.
Financial institutions are therefore investing in modern technology platforms that enable faster innovation while maintaining resilience, security and customer-centric service delivery.
The adoption of FinnAxia® 9.0 aligns with Stanbic IBTC Bank’s broader strategy of leveraging technology to create value for clients and maintain high standards of operational excellence.
“Our relationship with Nucleus Software has spanned a decade and forms part of our broader commitment to continuously strengthening the solutions and services we provide to clients.
“As transaction banking continues to evolve, we remain focused on investing in capabilities that help businesses operate with greater speed, visibility and confidence.
“The advancement to FinnAxia® 9.0 enhances our transaction banking platform and strengthens our ability to deliver innovative, efficient and customer-focused solutions in a rapidly changing environment,” the Executive Director of Corporate and Transaction Banking at Stanbic IBTC Bank, Mr Eric Fajemisin, stated.
Also speaking on the development, the Head of Transaction Banking at Stanbic IBTC Bank, Jesuseun Fatoyinbo, said, “Transaction banking today is about delivering intelligent, seamless and responsive experiences for customers. This enhancement further strengthens our ability to simplify customer journeys, improve operational efficiency and introduce new capabilities more rapidly. It reflects our continued commitment to supporting clients with solutions that evolve alongside their business needs and growth ambitions.”
Speaking on the milestone, the chief executive of Nucleus Software, Parag Bhise, said, “We value our long-standing relationship with Stanbic IBTC Bank and are pleased to support the Bank’s continued efforts to enhance its transaction banking capabilities.
“FinnAxia® 9.0 has been designed to help financial institutions respond to evolving customer expectations through improved automation, connectivity and operational efficiency.”
The advancement to FinnAxia® 9.0 represents the latest step in the ongoing collaboration between Stanbic IBTC Bank and Nucleus Software to strengthen transaction banking capabilities and deliver innovative solutions that support the evolving needs of businesses.
By combining Stanbic IBTC Bank’s customer-centric approach with Nucleus Software’s technology expertise, the partnership continues to drive greater efficiency, agility and value for corporate and institutional clients.
By Adedapo Adesanya
Standard Chartered has launched its ninth sub-fund under its Variable Capital Company (VCC) platform, partnering with Allianz Global Investors (AllianzGI) as the sub-manager to provide eligible clients with access to a gold-focused investment strategy.
The new Signature Select Enhanced Gold Income Fund combines exposure to gold with an enhanced income-generation strategy. The fund invests in gold exchange-traded funds (ETFs) and uses a covered call strategy to seek regular income while allowing investors to participate in the potential long-term appreciation of gold.
Standard Chartered said gold could help diversify investment portfolios because of its relatively low correlation with traditional asset classes and its potential to provide resilience during periods of geopolitical, monetary and market uncertainty.
The fund is available from this month to Accredited and Professional Investors across the Bank’s Priority, Priority Private and Private Banking segments in Hong Kong, Singapore, the United Arab Emirates, Jersey, Kenya and Nigeria. Taiwan is expected to be added later in 2026.
AllianzGI, which has more than 700 investment professionals globally as of March 31, 2026, will provide investment management expertise for the fund.
Its Global Multi Asset Team will be responsible for options selection and the day-to-day management of the portfolio, drawing on its experience in portfolio construction, derivatives implementation, risk management and multi-asset investing across different market cycles.
Mr Sumeet Bhambri, Global Head, Advisory and Managed Investments, Wealth Solutions, Standard Chartered, said the partnership with AllianzGI would strengthen the bank’s latest VCC fund and provide clients with a differentiated investment strategy.
“As clients seek greater diversification amid an increasingly uncertain market environment, the fund provides access to a differentiated strategy that combines gold’s portfolio diversification benefits with enhanced income potential,” Mr Bhambri said.
He added that the launch reflected Standard Chartered’s commitment to expanding its wealth platform through strategic partnerships and delivering innovative investment solutions to clients.
On his part, Mr Marc Gualandi, Head of Global Banks at Allianz Global Investors, said the fund was designed to give investors exposure to gold’s long-term value proposition while generating income through an active options strategy.
“We believe gold can play an important role as a long-term allocation within a well-diversified portfolio,” Mr Gualandi said.
He said AllianzGI would leverage its expertise in income strategies, portfolio construction and risk management to help investors pursue income and long-term portfolio resilience.
Standard Chartered established its VCC platform in June 2024 to combine the expertise of leading fund managers with its global asset-class specialists and provide clients with access to customised investment strategies.
The latest launch brings the total number of sub-funds on the platform to nine and marks Standard Chartered’s fourth fund launch in 2026.
