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Diamond Bank to Complete Sale of UK Subsidiary in Q4 ,Return to Profitability—CEO

Chief Executive Officer of Diamond Bank Plc, Mr Uzoma Dozie, has revealed that the sale of the company’s subsidiary in the United Kingdom would be finalised in the fourth quarter of 2018…even as Shares of Diamond Bank were traded at the Nigerian Stock Exchange (NSE) on Wednesday at N1.45k, already rising by 4.32 percent.

Mr Dozie made this disclosure while reacting to the third quarter financial statements of Diamond Bank released last week.

According to the bank executive, this and other actions to be taken by the lender should lead the firm to profitability in the fourth quarter.

“As we move into the final quarter of the year, we expect headwinds to continue driven by emerging situations in developed economies as well as our domestic political realities.

“Despite this, our investors can expect a further decline in Non-Performing Loans (NPLs), a further increase in our digital footprint and completion of the sale of the UK subsidiary.

“Through these actions, we remain optimistic about the medium to long term outlook of Diamond Bank and its return to strong profitability,” Mr Dozie was quoted as saying.

Earlier this year, Diamond Bank Plc struck a deal with British industrialist, Mr Sanjeev Gupta, for the 100 percent sale of its UK branch after selling its West African subsidiaries in 2017.

According to Diamond Bank, it was committed to pursuing a quick completion of the transaction with GFG Alliance subject to approval of the Financial Conduct Authority and Prudential Regulation Authority, which regulate banking business in the UK.

The lender had noted that the sale of its international subsidiaries was not expected to cause service disruptions for customers located around the world as they could continue to enjoy enhanced and convenient banking services through its digital channels.

In August this year, Mr Dozie had said the transaction was already in the change of ownership process, assuring that the exercise would be finalised before the end of the year.

In May 2018, Diamond Bank posted a 2017 loss, its first time in the red in six years after selling assets to conserve capital and to focus on its home market.

Its half-year 2018 pre-tax profit declined 69 percent to N2.92 billion.

In its Q3 results, the financial institution’s profit before tax dropped to N3.1 billion from N4.8 billion, while the profit after tax depreciated to N1.7 billion from N3.9 billion.

Also, the gross earnings for the period under consideration dropped to N142.5 billion from N143.7 billion, with the interest and similar income going down to N108 billion from N112.5 billion a year ago, while the net interest income depreciated to N67.1 billion from N77.7 billion.

In addition, customer deposit dropped by 8 percent year-on year to N1.107 billion due to re-pricing and non-rollover of high priced maturing deposits, and migration to government securities.

According to the CEO, these results were affected by the challenging environment operated in the period under review.

“The global economy is currently witnessing a shift in trade relations alongside continued interest rate adjustments. This has led to greater volatility across markets and increasingly fragile economies.

“Nigeria’s economy has not been immune to certain headwinds, so that while the economy recorded quarters of expansion, the rate of growth has weakened. However, against this backdrop, our digital-led retail strategy has remained robust.

“Through this strategy we have been able to continue scaling up by reaching a wide pool of customers both cost effectively and efficiently.

“As a result of our network and digital infrastructure, during Q3 we reached the N1 billion mark in total loans disbursed to Small and Medium Enterprises (SMEs).

“Alongside this, we introduced the SMEzone, a platform targeted at keeping entrepreneurs well positioned for competitiveness through community and continuous learning.

“We are investing more in businesses in the middle market because we see entrepreneurs as a key driving force for economic growth. This focus is in line with and supportive of our own recovery and return to profitability,” Mr Dozie said in the statement.
Last week, there were reports that some investors were interested in Diamond Bank, but the mid-tier bank said since refuted the speculations.

Shares of Diamond Bank were traded at the Nigerian Stock Exchange (NSE) on Wednesday at N1.45k, already rising by 4.32 percent.

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