Diamond Bank plans to raise $750m for expansion, CFO says

Diamond Bank Plc plans to raise as much as $750 million to finance an increase in lending, Chief Financial Officer, Abdulrahman Yinusa said.

The company is preparing to raise the money through a share sale or debt offering this year, Yinusa

said by telephone on Monday, from Lagos.

Shareholders will vote on the plan at an April 30 meeting, he added.

The fund raising comes a year after the lender raised its annual loan-growth target to 40 percent from 20 percent.

While Diamond is yet to report full-year earnings, first-half profit rose more than fourfold to N9.99 billion ($63 million), the lender said in July.

Diamond Bank stock has risen 44 percent this year, outpacing the 22 percent increase of Nigerian Stock Exchange All-Share Index.

Central Bank of Nigeria Governor, Lamido Sanusi, fired the chief executive officers of eight of the country’s 24 lenders in 2009 and bailed them out with N620 billion after loans by banks to stock speculators and fuel importers pushed the industry to the verge of collapse.

The government then set up the Asset Management Corporation of Nigeria (ANCON) to buy bad debts from the country’s banks, including a N25 billion loan Diamond Bank had extended to Geometric Power Ltd., a power generation company, to enable them to resume lending.