SWITZERLAND, AUGUST 08 – Titi, a long-time customer of the now defunct Diamond bank was shocked when she discovered that her beloved bank is no more, but instead, her account will now be domiciled with Access Bank. The next time she visited the branch of the bank she used, it was Access Bank colours everywhere; the setting had changed, and so had most of the staff. She couldn’t even see Chuks (not his real name), her former account officer with whom she had developed a good rapport over the years.

“Chuks understands my banking needs and is always willing to help me when I need to get information or want a financial facility from the bank. It feels strange having to deal with a new set of people and a new system all so suddenly,” Titi told Today’s Echo with a bit of apprehension.
There are millions of loyal customers like Titi who had grown attached to the 28-year-old bank and now find it difficult to adjust to new realities under an acquisition by Access Bank. Whatever is Diamond Bank’s loss is now Access Bank’s gain. Under Albert Wigwe, the bank has arguably become Nigeria’s biggest retail bank.

According to media reports, Diamond Bank traded away its independence together with a 19 million customer-base, made up of 10 million mobile users; 7,000 digital and financial inclusion customers; 277- branch network; and 10.2 million credit/debit cards issued so far.

By November 2018, it was clear to the Diamond Bank Management that they could not hold on to the bank with the dire situation of things. The share value of the company had fallen from N7 to N1.37 within 5 years and the company had a Non-Performing Loan (NPL) ratio of 12.6 per cent, against five per cent industry benchmark, with attendant high impairment charges. Also, total liability had climbed to N1.33 Trillion compared with a total shareholders fund of N221.6 billion.

According to banking experts, the huge NPL predisposed the bank to a yearly impairment charges of more than N25 billion, which particularly left its 2018 nine-month profit after tax at less than N3billion, as loans and advances to banks and customers peaked at N749.3 billion.
Also, the bank’s shareholders’ fund at N221.6 billion is subjected to a total liability of N1.33 trillion.


But the story of Diamond Bank’s fall also includes the thousands of staff at the bank who suddenly find themselves under a new system and are struggling to adjust to new realities.
Today’s Echo gathers that staff of the bank have been leaving in droves, with many of them unwilling to adapt to the Access Bank corporate policies, which is significantly different from that of Diamond Bank. According to a source inside the bank, some of the bright minds in the company have been poached by other banks, especially UBA.
“The Head of Card Services has already left to UBA and the Head of Retail Banking may soon leave,” our source, which asked not to be named, said.
Five years ago, Diamond Bank was the poster for how a successful Nigerian family business is run. Founded in 1991 by Pascal Dozie, one of Nigeria’s greatest business tycoons and boardroom maestros, Diamond Bank has waded through the storms over the years to become a respected brand. Dozie, who is also a former Chairman of MTN Nigeria and the Nigerian Stock Exchange(NSE), was once described by Forbes as the ‘Rolling Stone That’s Never At A Loss’.

How did a company with such a solid foundation fail?

Read more: https://www.todaysecho.com/business/todays-echo-exclusive-diamond-banks-fall-and-lessons-for-family-businesses-in-nigeria/