Diamond Bank denies talking with investors over capital injection as shares fall

Tier-2 financial institution, Diamond Bank Plc. has denied media reports that it was in talks with new investors to raise fresh capital for the company.

It was reported that the funds, which were to be injected by foreign intersperse, were part of the measures to recapitalise the bank as its asset value had been eroded by increased non-performing loans and high operational cost.

Recall that the mid-tier bank had on Thursday said the Chairman of its board, Oluseyi Bickerseth, and three other directors resigned “with immediate effect for varied personal reasons.”

Although, the lender did not clearly state why they resigned, but it was gathered the four key members of its board were asked to step down to make room for new management for easy capital raising.

The management of the bank made this known on Friday in a notice sent to the Nigerian Stock Exchange (NSE).

“Diamond Bank is not in talks with any party, global or otherwise, for any capital injection.

“While previous communication from the bank has highlighted a need to shore up the bank’s capital adequacy ratio (CAR), the preferred option is an internal capital management programme,” the bank said in a statement on Friday.

Meanwhile, the announcement appeared not to have gone down well with its shareholders as the bank’s shares closed at N1.44 per share on Friday after it fell by 3.36 percent, the biggest drop in over six weeks.

Read also: Diamond Bank shares hit highest level in 4 months as Chairman, 3 directors resign

Ripples Nigeria reports that the stock had been on bullish trend since last Monday to reach N1.49 per share on Thursday, their highest level in four (4) months.

Besides, Diamond Bank’s earnings results for nine months ended September 30, 2018 showed a worsening financial state of the company, just as its gross earnings for the review period dropped to N142.5 billion from N143.7 billion a year earlier.

A further analysis revealed that the company’s profit before tax fell from N4.8 billion to N3.1 billion, while the post-tax profit declined from N3.9 billion to N1.7 billion in the period under review when compared to the same period in 2017.

Owing to this terrible performance, the Diamond Bank’s Earnings Per Share (EPS) dropped by 59 percent to 7 kobo.

 

RipplesNigeria… without borders, without fears

Click here to join the Ripples Nigeria WhatsApp group for latest updates.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now