Diamond Bank struggles for survival

By Gbenga Adedayo

Diamond Bank Plc is currently entangled in capital deficit, and struggling to stay afloat due to high financial exposure worsened mainly by non-performing loans.

These non-performing loans resulted from inability of the bank to recover credit from debtors, mainly high net worth individuals and corporate organisations.

As a result, Diamond bank’s capacity to meet Central Bank of Nigeria’s minimum adequacy ratio is currently threatened, thereby putting the bank at risk, with its capital not commensurate with the bank’s overall risk profile.

Banks are required to maintain a minimum regulatory capital adequacy ratio (CAR) of 10 – 15 percent.

In order to stay afloat and remain in business, the bank has therefore embarked on some measures, including divestment from its West African subsidiaries in Togo, Senegal, Benin, Cote d’Ivoire, and Manzi Finances S.A, among others.

This has also led to the recall of its top management employees in these countries, including that of the United Kingdom, most of whom have been relieved of their services.

The bank has embarked on cost reduction measures leading to job cut at the top level. At the last count, over 12 senior management employees have been asked to resign.

As part of the survival strategy, Diamond Bank is now shifting focus from corporate banking to retail and personal banking with ambitious recuperation drive.

In line with the new focus, the bank has concluded plans to massively recruit fresh graduates for this exercise with systematic plans to reduce top management level considered too heavy.

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