April 8 (Bloomberg) -- Nigeria’s Diamond Bank Plc plans to raise as much as $750 million to finance an increase in lending, Chief Financial Officer Abdulrahman Yinusa said.
The lender plans to raise its capital adequacy ratio, a measure of financial strength, to between 20 percent and 25 percent to enable it fund more projects in the oil, gas, power and manufacturing industries, Yinusa said by telephone today from the commercial capital of Lagos.
The bank is preparing to raise the money through a share sale or debt offering this year, Yinusa said. Shareholders will vote on the plan at an April 30 meeting, he added.
The fundraising 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 9.99 billion naira ($63 million), the lender said in July. The lender’s capital ratio climbed to 16 percent in 2012 after Diamond raised $200 million, less than the $500 million it initially sought, Yinusa said.
The stock fell 3.5 percent to 7 naira at the close of trading in Lagos. It has risen 42 percent this year, outpacing the Nigerian Stock Exchange All-Share Index’s 24 percent gain.
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 620 billion naira after loans by banks to stock speculators and fuel importers pushed the industry to the verge of collapse.
The government then set up Asset Management Corp. of Nigeria, or Amcon, to buy bad debts from the country’s banks, including a 25 billion-naira loan Diamond Bank had extended to Geometric Power Ltd., a power generation company, to enable them to resume lending.
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