By Ishaya Ibrahim
Diamond bank has been suffering string of setbacks, especially in 2018. In the first quarter, its profit shrank by 75 percent. In half year 2018, it was by 78 percent. Early this year, the bank shutdown its operations outside Nigeria.
The future is looking bleak for the Uzoma Dozie-led team at Diamond bank. To salvage the situation, the bank has entered talks with investors that could acquire it and put it back to profitability.
Early in the week, there were speculations that the bank was going to be swallowed by Access bank in a deal that could have positioned Access as Nigeria’s number one bank in assets and size. But both banks swiftly deny the story.
Many of the bank’s customers took to their branches in Lagos and Owerri working their ATM cards to pull whatever money they had left in the vault.
Others beseiged the customer care and tellers making enquiries and collecting as much cash as they had need.
The unusual cash withdrawals from the customers affected most of the personnel, some of who took time to educate the customers that there was no problem with Diamond bank.
“We wish to state categorically that the (Diamond) bank is not in discussion with any financial institution at the moment on any form of merger or acquisition,” Uzoma Uja, Diamond bank company secretary said in a statement.
Regardless, an insider source told our reporter that it is only a matter of time for Diamond bank to be acquired, not necessarily by Access bank as widely reported.
“The bank is challenged, no doubt, but customers’ deposits won’t be affected. Name may change, management may change, but nobody will tamper with depositors’ funds,” the source told TheNiche.
He added that the acquisition talk has gone far. He said the process started after the West African and UK branches of the bank were closed early this year, couple with two major of its investors pulling out their funds.
For instance, it was gathered that the recent resignation of the chairman of board and three non executive directors was sequel to a protracted dispute involving one of the major investors, Carlyle Group (NASDAQ CG).
We learnt the beef was over the composition of the board of the bank where the founding owner, Pascal Dozie, wants someone close to the family to be on the board.
The Carlyle Group had in August 2014 invested $147 million in Diamond Bank when the bank made a $305 million rights issue.
Announcing the investment November that year, the bank said the rights issue was to improve its Tier 1 capital, strengthen its balance sheet and support its continued growth plans.
It said the proceeds would be used for the development of its “IT infrastructure, working capital support and the expansion and refurbishment of its branches.”
Also commenting at the time, Genevieve Sangudi, Managing Director and Head of West Africa for the Carlyle Sub-Saharan Africa Fund, said the group was “very pleased to join the Diamond Bank Group as an investor.
“We are fully in support of the bank’s strategic goal to become one of the most successful Tier 1 banks in Nigeria and West Africa, and we look forward to supporting the Bank towards achieving this objective.”
Welcoming the investor, Uzoma Dozie, the Group Managing Director/Chief Executive Officer (Designate) of Diamond Bank, said: “We are confident that Carlyle’s support will be fruitful and benefit all stakeholders. They bring global expertise in financial services and banking, having invested $4 billion globally in over 25 financial services companies, along with long-standing experience in emerging markets.
“Diamond Bank also stands to benefit from Carlyle’s extensive network of financial services specialists as we continue to strengthen our market position, expand our commercial and retail offerings and further enhance our operations. We are delighted to have Carlyle as a significant shareholder of the Bank.”
An insider said the dispute that led to the recent resignations centred on the insistence of the founder of the bank, Paschal Dozie, to have his son on the board.
It was, however, not clear whether he meant Uzoma who has been the GMD/CEO of the bank since 2014.
The Carlyle Group, on its website describes itself as “a global alternative asset manager with $203 billion of assets under management across 129 funds and 141 fund of funds vehicles as of September 30, 2014.
“The group has expertise in various industries, including financial services and employs 1,700 people in 40 offices across six continents.
“Launched in 2011,The Carlyle Sub-Saharan Africa Fund and its affiliates by 2014 had invested almost $300 million across a variety of industries, including logistics, mining services, retail and financial services in countries, including Nigeria, Mozambique, Zambia, Tanzania, the Democratic Republic of the Congo and Southern Africa.
Diamond Bank is also also suffering from the effect of billions of non-performing loans over the years.
But Ezechinyere Anyanwu, media relations officer of Diamond bank denied any form of stress affecting the bank. He also dismissed report of panic withdrawal by depositors.
But our findings indicate that many of the bank’s customers beseiged Diamond branches in parts of Lagos and Owerri, with insider sources saying some of the customers requsted to close their accounts.
“Why do you need to close the account? Diamond bank is not having any problem that can affect the depistors money. There is no amount of cash you will need now from your account you will not get immediately as before,” TheNiche overheard one staff of the bank telling a customer at an Ikeja branch on Tuesday.
Efforts to get Chioma Afe, head, corporate communications of Diamond bank were not successful. Her phone was switched off at the time of writing this report.
