Diamond Bank Plc, a Nigerian lender, fell the most since May 2005 after it disclosed plans to raise $750 million to finance projects and meet central bank capital requirements.
The lender’s shares dropped 10 percent to 6.3 naira, the most on record, at the close in Lagos, Nigeria’s commercial capital where the bank is based. Diamond Bank has advanced 28 percent this year, compared with the 19 percent rise of the Bloomberg NSE Banking 10 Index, which tracks the most capitalized lenders in Africa’s biggest oil producer.
Diamond Bank plans to raise $750 million in shares or bonds this year to fund more more projects and raise its capital adequacy ratio, a measure of financial strength, to between 20 percent and 25 percent, Chief Financial Officer Abdulrahman Yinusa said in an interview yesterday.
“Concerns are being reflected in the moderation in the share price over the last few days,” Adeolu Omotola, an equity analyst at Asset and Resource Management Company Ltd., said by telephone from Lagos today. “It’s significant.”
The fundraising comes as Diamond Bank reported today that full-year 2012 profit rose 61 percent to 22.1 billion naira ($140 million), as loans to customers surged 51 percent.