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REUTERS SUMMIT-Nigeria's Diamond Bank seeks $550 mln capital this year - CFO
April 9, 2013 / 2:08 PM / 4 years ago

REUTERS SUMMIT-Nigeria's Diamond Bank seeks $550 mln capital this year - CFO

(For other news from Reuters Africa Investment Summit, click here)

* Diamond to raise equity or debt, possible Eurobond

* Loan growth to 20 pct this year

By Chijioke Ohuocha

LAGOS, April 9 (Reuters) - Nigeria’s Diamond Bank plans to raise $550 million in debt or equity to expand its lending operations this year, the bank’s chief financial officer said on Tuesday.

CFO Abdulrahman Yinusa told a Reuters Africa Investment Summit in Nigeria’s commercial hub of 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 added that the bank expected a 20 percent increase in its loan book this year, from its current 500 billion naira ($3.17 billion), after last year’s 40 percent increase largely reflecting a recovery from write downs of bad loans.

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

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

“We need to be able to do either equity or debt,” he said, adding that part of it could be a Eurobond. The bank last year appointed HSBC, Standard Chartered Bank and Renaissance Capital to lead manage a $300 million Eurobond, but Yinusa said whether that goes ahead would depend on how attractive the pricing is 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 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, Yinusa said. The move would help Diamond profit from growing trade flows between Europe and Nigeria, he said.

Diamond on Tuesday reported a pretax profit of 27.5 billion naira ($174.5 mln) for 2012, against a loss of 17.9 billion naira a year earlier, but its shares fell the maximum 10 percent allowed because it said there would be no dividend.

$1 = 157.5250 naira Editing by Tim Cocks

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