Nigeria's Diamond Bank directors quit, paving way for recapitalisation

The board chairman of Diamond Bank, Oluseyi Bickersteth and three other directors have resigned from the commercial lenders with immediate effect, the bank said on Wednesday.

This sudden resignation of the four directors of the bank would pave way for the lender to be repositioned for new investors to inject fresh fund into the mid-tier lender.
Diamond Bank shares rose to their highest in almost two months in late trading on Wednesday, gaining 9.45 percent to close at 1.39 naira.
Two banking sources told Reuters that the lender was also in talks with new investors.
The bank did not provide any reason for the resignation of Bickersteth, appointed in July, or for the other directors, but said in a statement to the local bourse that it would update the market in due course.
“The bank has been facing capital challenges which has been a major drawback for the share price. With a new investor coming on board that has boosted confidence,” one trader said.
Chief Executive of the bank, Uzoma Dozie is expected to continue to run the bank until next year, before resigning.
“News of board resignations is supposed to be bad news but investors started to buy the stock,” another trader said.
Analysts have noted that the bank has maintained a 16 percent capital adequacy ratio, the minimum required by the central bank, which has limited growth and profitability.
In 2016, the bank said it was conducting a capital management plan and would ensure it met regulatory requirements, adding that it was considering raising fresh capital and selling some assets to strengthen its capital base.
In May, Diamond Bank posted a 2017 loss, its first time in the red in six years, despite asset sales.
The mid-tier lender struck a deal with British industrialist Sanjeev Gupta earlier this year to sell its UK subsidiary, after selling its West African business last year, bringing to an end its 18-year push abroad.

The Bank was founded by Pascal Dozie, who served as its chief executive for over ten years before quitting the stage to become the chairman of the board and later move on to head the board of MTN Nigeria.