BUSINESS Shareholders query Diamond Bank over N47bn expenses, fines
Diamond Bank shareholders, yesterday, expressed their displeasure with the management and board of the bank for spending the amount N47 billion as operating cost within 12 months.
The amount, though spent under operating cost, was higher than the sum of N36 billion the bank said it has spent and recorded in the year 2012.
The shareholders also queried the rationale behind the bank’s incurring of N8 million fines from the Central Bank of Nigeria (CBN) during the 2013 financial year.
At the bank’s 23rd annual general meeting held in Lagos, the shareholders raised their eyebrows against the sum of N7.4 billion spent on advertising and promotion, comparing that with N2.223 billion spent in 2012 for the same purpose.
Other issues that attracted query from the shareholders were the N2.7 billion sinking fund to the Assets Management Corporation of Nigeria (AMCON), N2.010 billion spent on repairs and maintenance, against N1.458 billion spent previous year, N1.804 billion on professional fees, N2.765 billion spent on security and power, auditors’ remuneration put at N188 million as well as N20.998 billion on general administration, against N16.724 billion spent in the previous year, NDIC premium N4.160 billion and the N3.947 billion used for staff salaries. The shareholders also sought to know the reason for why the bank incurred the CBN’s wrath of N8 million fines and penalties by the refund to a customer the sum of $827,223 as directed by the apex bank, and for promotion of two key management personnel without approval by the CBN, as well as another penalty of N1.995 million for withholding the fund of a customer for 26 days after a formal letter seeking to withdraw the fund.
One of the shareholders, Nonah Awoh, first put the management to task when he asked to be told how the bank arrived at the huge expenditures and why it incurred huge financial penalty from the apex bank.
His submissions received the support of other shareholders who also requested for explanations.
In his response, the chief executive officer of the bank, Alex Otti, explained that the bank arrived at spending N7.433 billion during the 2013 financial year as a result of the bank’s rebranding exercise and the need to promote other products of the bank.
On the over N2 billion sinking fund, Otti said the fund was the decision of the bankers committee even though he was against it when the issue was brought at the committee’s meeting.
According to him, however, the idea was well received by the others at the meeting, hence, it was approved for implementation.
On the auditors’ renunciation, although he said the management would look into it, Otti explained that was the standard practice around the world.
Otti said the bank performed well in 2013 with its total assets growing to N1.51 trillion from N340 billion recorded previous year.
He said that the current customer deposits of N1.21 trillion reflected year on year growth of N295.8 billion or 32.5 per cent while retail deposits grew by 20 per cent to N366 billion.