Customers of Diamond Bank Nigeria using the bank’s mobile app eSUSU feature for group and personal savings have lamented non-payments, indicative of a probable financial crisis at the bank.
TheNewsGuru (TNG) reports this is following downgrade of Diamond Bank, reflecting uncertainty over its solvency and liquidity in view of very weak asset quality, highly vulnerable capital position as well as tight foreign currency (FC) liquidity ahead of an upcoming maturing USD200 million Eurobond in May 2019.
Customers who spoke with TNG at the weekend expressed fears of losing their hard-earned money following recent developments, especially rumours of acquisition, at the bank.
The customers said they had used the bank’s mobile app thrift saving feature consistently without issues since they were aware of it, but are worried after the bank refused to pay recently.
When contacted, officials at the bank told TNG that deactivation/liquidation process usually takes within 24 to 48 working hours to be completed.
However, one of the customers told TNG of having two personal saving plans on the eSUSU platform, and that, five days after end of the plans that Diamond Bank was supposed to make payments available, the bank was yet to pay.
When asked if the bank is in a process to discontinue the eSUSU feature, Diamond Bank said, “We can also confirm that the eSUSU services are very well available”.
The bank, however, pleaded with customers to be patient.
The fears of the customers who spoke with TNG were heightened by especially rumours that Access Bank was in talks to acquire Diamond Bank and the recent downgrade of the bank.
In November, Access Bank was said to making negotiations to add Diamond Bank’s portfolio to its assets in 2019. Talks on the acquisition were on, according to sources, who said the fusion is set for the first quarter of next year.
However, Diamond Bank immediately dispelled the rumours, urging the banking public, particularly its customers, to avoid panic withdrawals while assuring them of the safety of their funds.
Also, only recently, Diamond Bank got approval of the Central Bank of Nigeria (CBN) to operate as a national bank only with immediate effect, resulting in the bank ceasing from operating as an international bank.
The move followed the bank’s decision to sell its international operations, which included the disposal of its West African Subsidiary in 2017, and Diamond Bank UK, the sale of which is currently in its final stages.
According to the bank, the re-licensing supports its objective of streamlining its operations to focus resources on the significant opportunities in the Nigerian retail banking market, and economy as a whole.
“The move to a national banking license marks a continuation of our strategy to focus on Nigeria’s significant fundamental trends, including a large underbanked population and Africa’s biggest economy.
“By focusing and optimizing our resources towards Nigeria and the priority area of retail banking, we will be better positioned for longer term growth and greater profitability.
“The reduction in minimum capital requirement also increases our capacity to expand the quantum of business and product services we can offer consumers, as well as representing a key step in strengthening our financial position,” Uzoma Dozie, Diamond Bank CEO said.
The change to national bank status enables Diamond Bank to maintain a lower minimum capital liquidity requirement of 10% as against 15% required for international banks.
The share price of Diamond Bank moved up by +56.92% in one week.
However, it has lost -15.7% in one month, -37.04% in six months, -32.89% in one year and -32% year to date.
In the week rounding off November, Diamond Bank was among the top 10 decliners on the Nigerian stock market, shedding 31.58% in shares in a week-trading.
In November alone, it lost 54% and was the worst performer in Nigeria’s all-share index.
The bank reported a loss after tax of N9.01 billion in its 2017 full-year financial results as against a profit after tax of 3.49 billion in the preceding year.
Recently, its chairman and three non-executive directors resigned from their positions in the move to recapitalize.