A Review of the Nigerian Energy Industry

Diamond Bank shareholders endorse $750m capital increase

Igwe Nnaemeka Achebe, Obi of Onitsha05 May 2013, Lagos – Shareholders of Diamond Bank Plc have endorsed the Board of Directors’ proposal to raise $750,000,000 additional capital in order to enhance the bank’s working capital and finance business development initiatives.

The shareholders also approved the bank’s proposal to raise its authorised share capital from N10 billion to N15 billion by the creation of additional 10 billion ordinary shares of 50 kobo each, ranking pari pasu in all respects with its existing ordinary shares.

Addressing shareholders at the 22nd Annual General Meeting, AGM, Chairman of the bank, Obi of Onitsha, Nnaemeka Achebe, said “Diamond Bank has bounced back to profitability following the significant write-offs we had to do in 2011 to clean up our books and reposition the bank.”

In his comment at the meeting, the Group Managing Director of the Bank, Dr. Alex Otti, commended the shareholders for their loyalty and support.

According to him, “It would not be better to declare dividend and still come back to seek more capital from our shareholders. Our focus is to optimise balance sheet efficiency while increasing returns and minimise risks, all within the context of financial intermediation, which is our primary mandate.”

He further explained that the bank has divested from five of its subsidiaries according to the Central Bank of Nigeria (CBN)’s directives, but noted that step has been taken to recapitalise few of the subsidiaries like Diamond Bank Benin and the Pension Fund firm.

He said: “We will open more branches in many new locations this year especially in under -represented markets with strong economic fundamentals and where our services will be a strong agent for growth. Internationally, on March 26, 2013, we concluded the acquisition and took over control of a niche bank in UK. This underscores our intention for a two pronged approach, acquisition and organic growth, to expansion.”

In their comments at the AGM, shareholders unanimously tasked the Board of the Bank to ensure that dividend is declared next year.

Sir Sunny Nwosu, National Coordinator, Independent Shareholders Association of Nigeria (ISAN), who spoke the minds of members at the meeting, commended the bank for bouncing back to profitability. According to him, “We shareholders expect that you will give us dividend next year having returned to profitability. We thank the Staff, management and Board for the improved performance.

Dr. Farouk Umar, Chairman, Advancement for the Rights of Nigerian Shareholders, equally commended the bank for its impressive performance as it posted profit before tax (PBT) of N27.5billion and profit after tax (PAT) of N22.1 billion from a loss position of N18billion and N13 billion in 2011 respectively.
*Babajide Komolafe & Peter Egwuatu, Vanguard

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