A Review of the Nigerian Energy Industry

Diamond Bank to increase focus on SMEs

Naira24 November 2014, Lagos – With the appointment of Mr. Uzoma Dozie as the Chief Executive Officer designate of Diamond Bank Plc, there are indications that the bank will increase its focus on the financing of the small and medium scale enterprises (SMEs) as well as retail banking.
Dozie gave the indication when he hosted his first conference call as CEO-designate recently.
The conference call was to discuss the financial institution’s nine months 2014 performance and provide an outlook on the business post the recent CEO change.

Commenting on the findings from the conference call, Banking Analysts at Renaissance Capital, Mr. Adesoji Solanke said his firm has revised and rolled over its forecasts post updated guidance on Diamond Bank, even as it maintained its ‘BUY’ rating.
“Uzoma recently hosted his first conference call as CEO-designate of Diamond, and our take is that it is pretty much business as usual, at least that is the plan today.
“Nevertheless, we think there could be an incremental focus on retail and SME banking under his tenure, given this is his area of expertise,” he added.
Diamond Bank announced last week that it recently issued rights was 100 per cent subscribed.
8,685 million ordinary shares were issued, which raised the bank’s current number of outstanding shares to 23,160 million.
“The successful rights issue clears the capital overhang which has surrounded Diamond Bank over the past 24 months.
“Overall, we believe this should be viewed as positive news for Diamond in an environment where macro concerns continue to dominate and capital regulations for the Nigerian banks have tightened significantly.
“Considering that Actis divested of its stake during the rights issue period, we look forward to seeing the post-rights shareholding structure and any updates on board composition,” Solanke added.
Diamond Bank had reported a nine month 2014 Basel 1 capital adequacy ratio of 16.9 per cent which drops to 13.5 per cent under Basel 2/3.
“We have lowered our credit growth forecast to 15 per cent from 20 per cent over the next two years, and cut our profit before tax forecasts by 5-13 per cent.
“Management is optimistic on recoveries, but given the potentially higher focus on retail/SME banking and Nigeria’s weakening macro outlook, we have maintained our cost-of-risk estimates at three per cent over the medium term,” he stressed.


– This Day

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