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Stock Exchange Backs Diamond Bank On Rights Issue

The Nigerian Stock Exchange has pledged its support for Diamond Bank Plc on its on-going Rights Issue exercise. This show of support was given when the Bank’s Management embarked on a Facts Behind the Issue session with capital market operators in Lagos recently.

The bank is planning to raise N50.38 billion through the rightsissue. A total of 8,685,145,863 ordinary shares of 50 Kobo each will be sold to existing shareholders whose names appear on the Register of Members and transfer books of the bank as of the close of trading on Friday, June 13, 2014, at N5.80 kobo. The stocks will be allocated on the basis of three ordinary shares for every five held.

The shares are payable in full on acceptance and tradable on the floor of the Exchange throughout the period of the Issue. The acceptance list opened on Wednesday, July 30, 2014 and will close on Tuesday, August 26, 2014.

Speaking at the event, Mrs. Taba Peterside, General Manager, Listings, Sales and Retention, Nigerian Stock Exchange who represented the Director General, Mr. Oscar Onyema said: “The bank is expected to wax stronger after the funds have been raised. We at the Nigerian Stock Exchange will give the bank our support to ensure that the transaction is successful.”

Presenting the rightsissue to the delight of the capital market professionals, Dr. Alex Otti, Group Managing Director/CEO, of Diamond Bank Plc. informed the shareholders that a large chunk of the proceeds from the issue would be deployed into branch network expansion and renovation, information technology upgrade and up-scaling of the retail segment of its operations.

The bank intends to expand its branch network to 350 from the current 257. More than eighty percentage of the money raised will be injected into actualizing this projection.

A part of the funds will also be channeled towards strengthening its competitive capacity in the middle market by developing and sharpening its strategic focus, especially in the area of Micro Small and Medium-scale Enterprises (MSME), sole proprietorship and the corporate business sector.

Otti said: “The retail end of the market is very important to us, therefore we will be investing 86%, which is about N42 billion in that area while development of IT infrastructure will consume about 4% and the remainder will be a part of the working capital. We do understand that to remain competitive we must think and work ahead.”

It would be recalled that the bank posted an excellent financial performance for the first half of the current financial year with a profit after tax of N13.8 billion as against  the N12.6 billion in the same period of 2013. Its total comprehensive income surged from N11.9 billion in 2013 to N14.1 billion this year, representing 19% increase. Total Assets of the bank now stands at N1.7 trillion up 15% from N1.5 trillion in December 2013 while deposits from customers rose to N1.3 trillion, up 8% from N1.2 trillion in December 2013.

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