Nigeria 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.
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.