BUSI­NESS Share­hold­ers query Di­a­mond Bank over N47bn ex­penses, fines

Daily Trust - - BUSINESS / NEWS - From Kay­ode Ekun­dayo, La­gos

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.

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