diamond bank pursue branch expansion

Diamond Bank Plc has said proceeds from its
N50bn rights issues will be used for branch
expansion and upgrade of its technology among
others.
A statement by the bank quoted its Chief Executive
Officer, Dr. Alex Otti, as saying this while
addressing shareholders shortly after the bank’s
rights issue offer.
Specifically, Otti was quoted as telling the
shareholders that a large chunk of the proceeds
from the issue would be deployed into branch
network expansion and renovation, information
technology upgrade and up-scaling of the retail
segment of its operations.
According to him, the bank intends to expand its
branch network to 350 from the current 257.
Following this projection, more than 80 per cent of
the money raised will be injected into the
expansion.
A part of the funds will be channelled towards
strengthening its competitive capacity in the middle
market by developing and sharpening its strategic
focus, especially in the area of Small and Medium
Enterprises, sole proprietorship and the corporate
business sector.
Otti said, “The retail end of the market is very
important to us, therefore, we will be investing 86
per cent, which is about N42bn in that area while
development of IT infrastructure will consume
about four per cent and the remainder will be a
part of the working capital. We do understand that
to remain competitive, we must think and work
ahead.”
The statement quoted some of the shareholders as
saying that the move by the bank to raise fresh
capital was commendable, especially as the
management had maintained stable growth and
profitability in the last three years.
The bank is issuing 8,685,145,863 ordinary shares
of 50 Kobo each, which will be sold to existing
shareholders whose names appear on the
registrar of members and transfer books of the
bank at the close of trading on Friday, June 13, at
N5.80k. The stocks will be allocated on the basis
of three ordinary shares for every five held.
The shares are payable in full on acceptance and
tradable on the floor of the Exchange throughout
the period of the issue. The acceptance list opened
since Wednesday, July 30, 2014 and will close on
Tuesday, August 26, 2014.
It quoted a shareholder, Mr. Murhi Ojo, as saying,
“The management of the bank has performed very
well. We have the confidence that the money that
will be realised will be prudently used and make
more profit for the shareholders. It is a welcome
idea and to me, the timing is right.”
The bank had posted a first half profit after tax of
N13.8bn as against the N12.6bn in the same
period of 2013.