Diamond Bank office
Obinna Chima with agency report
Diamond Bank Plc plans to raise $300 million (N47.205 billion) as it seeks to expand credit to customers, the bank’s Chief Financial Officer, Mr. Abdulrahman Yinusa has said.
Bloomberg quoted Yinusa to have said in an interview in Lagos: “Our target is for the loan to be raised by the end of this year, which will bring to $500 million what we have borrowed in the year. The purpose remains to expand our loan book and fund infrastructure.”
Having secured the approval of shareholders to raise $750 million in May, the $250 million that will remain may be borrowed over the next two years, depending on need, according to Yinusa.
While the company has no immediate plans for mergers or acquisitions, it intends to go to the capital market if it needs to raise funds after 2013 when “the market would have stabilised” in order to ensure “steady growth,” he said.
The commercial bank revised its loan-growth target for this year to 40 per cent from 20 per cent, “a modest projection from our third quarter performance,” he said.
The forecast takes into account the central bank’s decision to increase the cash reserve ratio for banks to 12 per cent, from eight per cent.
Diamond Bank’s first-half profit through June rose more than fourfold to N9.99 billion, from N1.71 billion a year earlier. Net interest income gained 71 per cent to N42 billion. The bank achieved a return on equity of 23 per cent in the third quarter against a target of 15 per cent for the year, “which indicates that it will exceed its targets for the full year,” Yinusa said.
With the administration of President Goodluck Jonathan seeking private investment to help overcome Nigeria’s infrastructure deficit, Diamond Bank sees opportunities for loans to companies building power facilities, railways and roads, according to Yinusa.
“We want to grow our loan book aggressively to a level before we will consider slowing down,” he said.