Whenever a financial institution is under serious threat of capital base, the seat of the managing director remains uncertain.
This may best define the scenario at Diamond Bank Plc even though it announced weekend that it had yet to receive any investment offer from potential investors.
There had been strong boardroom politics and strategic opposition to the continued stay of the current Group Managing Director, Mr. Uzoma Dozie even as the board is now on hot seat of reviewing all strategic options.
Business Hilights recalls that the Board of Diamond Bank Plc had announced the voluntary resignation of the Group Managing Director/Chief Executive Officer, Dr. Alex Otti, from the bank in October 2014 and revealed that Mr. Uzoma Dozie, will take over from him, subject to the approval of the Central Bank of Nigeria (CBN) which was later secured.
In the beginning, Uzoma was born in London, United Kingdom to Pascal G. Dozie, the founder and former chairman of the bank.
However, stronger signal to the apparent pressure on Uzoma to quit or remain as GMD and perform out-of-this-world that will pull capital capable of deepening the coffers of the bank is coming from the bank’s recent comment that four of its directors, including its former Chairman, Oluseyi Bickersteth, had resigned, fuelling speculation that the lender was in talks with a new investor to recapitalise.
Bickersteth told Reuters recently that he was still on the board of the bank and that he favoured looking at all options for recapitalisation, including a rights issue or a takeover. The bank has 61.9 per cent free float, while Carlyle owns a 17.75 per cent stake, which it bought for $147m in 2014 when the bank was trading at 0.6 times book value as against 0.15 times now.
Weekend, Business Hilights also gathered that capital squeeze which pushed directors of Diamond Bank to approach Access Bank for intervention in a bid to stave off a possible regulatory intervention and resultant withdrawal of the CBN’s operating licence in view of freezing capital adequacy ratio caused by high Non Performing Loans (NPLs) portfolio of over N150billion, has activated acquisition move rather than assistance that was sought.
Though the CBN is yet to open up on its recent stress test on banks, pundits are becoming convinced that many banks are not standing well when their minimum regulatory ratio is put on the table.
One of the first signs for banks whose ratio is suspect is indication to raise fresh funds.
Diamond Bank is at the verge of raising fresh funds after selling some of its foreign assets to strengthen its balance sheet.
In a statement to keep certain records straight, Diamond Bank averred that “The Board of Diamond Bank notes the media speculation relating to comments attributed to its former chairman, Mr. Oluseyi Bickersteth. Contrary to such media articles, the board wishes to clarify that the company has not received an offer from an investor to inject cash.
“We are in active discussions to appoint new board directors and we have the support of our major shareholders, including the Carlyle Group, to ensure successful operations.”
