Nigerian bank ‘to raise $550m’

NIGERIA’s Diamond Bank plans to raise $550m in debt or equity to expand its lending operations this year, the bank’s chief financial officer said yesterday.

Abdulrahman Yinusa told a Reuters Africa Investment Summit in Nigeria’s capital, Lagos, that the bank would use the funds to increase lending to the oil and gas, power and infrastructure sectors in Africa’s second-biggest economy.

He said the bank expected a 20% increase in its loan book this year, from 500-billion naira ($3.17bn), after last year’s 40% increase, largely reflecting a recovery from writedowns of bad loans.

The debt was part of $750m needed for operations, of which $200m had already been raised last year, he said.

“The balance of $550m is what we will raise this year,” Mr Yinusa said. The bank would seek to close the gap while pricing was favourable. It had not yet decided whether to issue debt or equity, but Diamond Bank would seek a shareholder vote on the plans this month, he said.

“We need to be able to do either equity or debt,” he said, and part of it could be a Eurobond.

The bank last year appointed HSBC, Standard Chartered Bank and Renaissance Capital to manage a $300m Eurobond, but Mr Yinusa said whether that went ahead would depend on how attractive the pricing was relative to other options.

Nigerian banks are increasingly seeking dollar financing for infrastructure projects, especially from power companies buying state assets under a privatisation programme launched this year.

Diamond Bank completed the acquisition of a London-based niche operation owned by Nigeria’s Access Bank last week, which Access had earlier bought off rescued lender Intercontinental Bank, Mr Yinusa said. The move would help Diamond Bank to profit from growing trade flows between Europe and Nigeria, he said.

Diamond Bank yesterday reported a pretax profit of 27.5-billion naira for last year, against a loss of 17.9-billion naira a year earlier, but its shares fell the maximum 10% allowed after it said there would be no dividend. Reuters