" /> Diamond Bank might raise new capital, sell some assets — CEO | Hallmarknews
Published On: Mon, Aug 15th, 2016

Diamond Bank might raise new capital, sell some assets — CEO

Diamond Bank is considering raising fresh capital and selling some assets in order to strengthen its capital base, its chief executive said on Wednesday.

Uzoma Dozie said the bank’s capital plan will ensure it meets all regulatory requirements both in the short term and in the future.

According to Reuters report, Diamond Bank’s capital adequacy ratio had fallen to 15.6 percent of assets by mid-year from 18.6 percent a year ago.

“We are doing a capital management plan and that will determine how much capital we want to raise, tenor and size,” Dozie told an analysts’ conference call.

“We don’t have any need to grow our branch network any more. We are also looking at some assets that we can dispose of and we are a long way into that,” he said.

Shares in the mid-tier lender, which has fallen 33 percent this year, were up 1.94 percent on Wednesday at 1.58 naira. The share price fell 59 percent last year.

The central bank shored up mid-tier lender Skye Bank this month with a loan and replaced its management after its capital fell below levels required by regulators and has been urging people not to panic about the banking system.

But pressure is building, with loan books – nearly half of them in dollars – hammered by a shrinking economy, a plunging currency and acute foreign exchange shortages in Africa’s biggest oil producing nation following the slump in oil prices.

The central bank has told lenders to set aside extra provisions against their dollar loans in the wake of the sharp fall in the naira since it floated the exchange rate in June.

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