Nigeria’s Diamond Bank said on Friday that no investors had come forward to inject cash into the company and that its board was reviewing all strategic options. The bank’s comment comes after it said last month that four of its directors, including its Chairman Oluseyi Bickersteth, had resigned, fuelling speculation that the lender was in talks with a new investor to recapitalise.
Diamond Bank has been managing its capital since 2016 to ensure it stays within the minimum regulatory ratio and has said it would consider raising fresh funds after selling some assets to strengthen its balance sheet.
“The Board of Diamond Bank … notes the media speculation relating to comments attributed to its former chairman, Mr Oluseyi Bickersteth … contrary to such media articles, the Board wish to clarify that the Company has not received an offer from an investor to inject cash,” the bank said in a statement. The mid-tier lender said it was in active discussions to appoint new board directors and that it has the support of its major shareholders, including The Carlyle Group, to ensure successful operations.
Bickersteth told Reuters last month he was still on the board of the bank and that he favoured looking at all options for recapitalisation, including a rights issue or a takeover. Diamond Bank has 61.9 percent free float while Carlyle owns a 17.75 percent stake, which it bought for $147 million in 2014 when the bank was trading at 0.6 times book value as against 0.15 times now. Nigerian businessman Pascal Dozie, who founded the bank in 1990, holds 14.2 percent with his family.
Analysts have noted that the bank has maintained a 16 percent capital adequacy ratio, the minimum required by the central bank, which has limited growth and profitability. Diamond shares were trading flat on Friday at 1.27 naira after hitting a year low this week. The bank had rallied 24 percent in one week to a four-month high on speculation it was in talks to raise fresh capital. Reuters
Pix: Diamond Bank headquarters
