Diamond Bank Sells West African Units for 61 Million Euros

LAGOS (Capital Markets in Africa) – Nigerian lender Diamond Bank Plc sold the majority stake in its units in four West African countries as it seeks to shore up capital and focus on the home market.

Manzi Finances SA, based in Abidjan, Ivory Coast, bought 97 percent of Diamond Bank’s ownership of units in that country as well as Benin, Togo, and Senegal for 61 million euros ($71 million), according to a filing on Friday to the Nigerian Stock Exchange. Regulatory approvals were given in all the jurisdictions covered by the transaction, which will be completed by the end of the year, the bank said in the statement.

Diamond Bank, of which private-equity firm Carlyle owns about 17 percent, said in May it plans to sell non-core assets to boost its capital-adequacy ratio, which was on the threshold of the regulatory minimum of 15 percent, as well as fund operations. Some Nigerian banks are struggling to cope with rising non-performing loans in the wake of economic contraction in 2016.

“After 18 years of building the Diamond Bank franchise in other markets in West Africa, the time has come to fully apply our resources to Nigeria,” Chief Executive Officer Uzoma Dozie said in the statement. With more than 15 million customers in Nigeria, the lender operates a framework that will allow it “scale rapidly, efficiently and cost effectively,” he said.

Diamond Bank’s shares rose by 5 percent to 1.06 naira at the close of trading in Lagos. That took the bank’s advance this year to 20 percent, compared with a 70 percent increase for the 10-member Nigerian Stock Exchange Banking Index.