Diamond bank<br />PHOTO: nigerianbulletin.com
The stakeholders in separate interviews with the News Agency of Nigeria (NAN) in Lagos said that the decision would encourage its banking space spread.
NAN reports that the bank, on Nov. 30, said that it had obtained a national banking licence from the Central Bank of Nigeria (CBN).
It explained that the move followed its decision to sell its international operations, which included the disposal of its West African Subsidiary in 2017 and Diamond Bank UK (DB UK Plc), the sale of which is currently in its final stages.
The bank would, therefore, cease to operate as an International Bank.
“The change to national bank status also enables the bank to maintain a lower minimum capital requirement of 10 per cent as against 15 per cent required for international banks,’’ the bank said in a statement.
Prof. Sheriffdeen Tella, Professor of Economics, Olabisi Onabanjo University Ago-Iwoye, Ogun said that the national banking licence would assist in the bank’s survival.
Tella said that it would encourage the spread of its banking space for deposit mobilisation and credit creation both of which were capable of assisting its survival.
“Diamond bank has always been on the edge; though a quite innovative bank.
“It is in the interest of the Central Bank of Nigeria (CBN) to keep the banking system stable and healthy to prevent systemic distress.
“So, expanding the scope of operation of Diamond bank is in order. However, the bank needs to take advantage of the window by becoming more innovative and aggressive in its operations,’’ Tella said.
He explained that the apex bank’s approval for the national banking licence would build confidence in the shareholders, customers of the bank and the general public.
Mr Sola Oni, a Chartered Stockbroker and Chief Executive Officer, Sofunix Investment and Communications, told NAN that the bank’s acquisition of national banking licence was a strategic decision.
Oni said that the bank had realised that its exposure to international banking was hitting hard on its top and bottom lines; hence the need to review its business strategy to cut costs.
“This is a professional decision that has prospects of improved earnings.
“The bank has publicly announced that its new decision to focus on the domestic environment does not imply that it will not be servicing foreign customers.
“The bold move is expected to strengthen its domestic competition, boost earnings and create value for its shareholders.
“Diamond’s approach is a lesson to other banks that might be carrying burden of international banking for egoistic reasons,’’ Oni said.
Also speaking, Mr Moses Igbrude, Publicity Secretary, Independent Shareholders Association of Nigeria (ISAN), said that the news around the bank lately had not been palatable to its shareholders.
Igbrude said that the bank had been passing through troubled water; the news of acquisition and refutal showed that all was not well.
“That the bank has challenges is not the issue now but the ability of its management to navigate and manage the problems, learn the lessons and come out of it strong and reliable is what matters.
“The news that Diamond Bank has gotten CBN approval for national licence is an indication that its management is on top of the situation, otherwise they would not have gotten such approval from the regulator, ‘’ he said.
Igbrude said that the bank should concentrate in Nigeria where it had core competence instead of spreading their tentacles into international business.
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