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Diamond Bank to Acquire 2 More Banks

Posted by By Ayodele Aminu on 2005/08/29 | Views: 1333 |

Diamond Bank to Acquire 2 More Banks

Diamond Bank Plc has said it would acquire one or two more banks to hasten its branch network expansion.

Diamond Bank Plc has said it would acquire one or two more banks to hasten its branch network expansion.

Managing Director, Diamond Bank, Mr. Emeka Onwuka who made this disclosure in chat with newsmen in Lagos however, refused to reveal the identity of the banks to be acquired.

THISDAY checks revealed that the ailing African International Bank Limited (AIB) may be one of such institutions to be acquired by Diamond Bank.

The bank is currently offering a total of one billion ordinary shares of 50 kobo each at N6.80 per share by a way of Initial Public Offering to (IPO) the investing public.

Specifically, Onwuka said Diamond Bank is not embarking on fund raising exercises or acquiring bank(s) boost its capital. The driving force, he stressed, is to maximise returns to shareholders.

“One of the factors considered for our consolidation was the need to increase branch network and get closer to our customers to drive our retail banking. So, we are not targeting capital to increase volume but to give unmatched returns to our shareholders,” he said.

Consequently, he stated that the money currently being raised would be “used to retool the bank we are going into union with because we need to enhance its facilities to what we expect of the new Diamond Bank.”

Diamond Bank had few months ago, acquired Lion Bank of Nigeria Plc. The two banks, according to Onwuka, are to operate as a single bank beginning from next October.

He expressed satisfaction with the deal, describing Lion Bank as “a very good, medium-sized and niche playing bank.”

He maintained the on-going IPO, which enters its third week today, is an opportunity for discerning investors who were not opportune to partake in the bank’s private placement last year.

Diamond Bank’s private placement last year required a minimum investment of N350, 000, hence it was therefore targeted at high net worth individuals and corporate bodies. The on-going IPO of the bank, which sells at N6.80 per share of 50 kobo, a sizeable discount on its quoted price of N7.75 at the Nigerian Stock Exchange, consequently provides an opportunity for those that could not participate in the private placement.

Diamond Bank had last year executed a successful private placement share offer scheme which took its shareholders’ funds from N6.7 billion to well over N18 billion. Recently the Bank also signed a Memorandum of Understanding (MOU) with Lion Bank of Nigeria Plc that will culminate in the acquisition of the latter. According to Diamond Bank’s Chief Financial Officer, Mr. Ohis Ohiwerei who spoke at the recent listing of the Bank’s shares at the Stock Exchange, the Bank’s strategic goal is to take its shareholders’ funds to N35 billion by year end.

The Bank’s audited results for 2005 reveal that shareholders’ funds currently stand at N20.7 billion after 100 percent retention of profit for the year.
With an expected addition of about N6 billion at the consummation of the Lion Bank consolidation deal, the Bank’s shareholders’ funds will be in the region of N27 billion and well over N30 billion after the IPO.

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