Aug 8 (Lagos) - The private sector arm of the World Bank said on Wednesday it would buy $70 million worth of convertible loans from Diamond Bank to boost the capital base of the mid-tier Nigerian lender.
Shares in the bank are currently trading at N 2.82 per share. In the past 2 weeks the shares have seen a sharp increase. Even over the past 2 months, the shares have been a huge gainers on the stock exchange in Lagos led by excellent results and hopes of a big dividend next year. The shares have seen a 46% increase in 2012. but if you take a longer term perspective, then most shareholders are still not enjoying a return on their investments. But Diamond Bank has put good structures in place including a good management led by CEO Alex Otti.
The World Bank unit, the International Finance Corporation (IFC), said the funding would help finance lending to small and medium-sized businesses in Africa's second-biggest economy.
"The investment provides a unique opportunity ... to support Diamond Bank's expansion into key economic sectors that have relatively low banking penetration," IFC's Marcos Brujis said in a statement.
DIAMOND BANK (DIAMONDBNK) was not among the banks that had to be rescued in a 2009 bail out by the central bank to prevent a collapse of the over-leveraged banking system.
Last month, it reported a fourfold increase in first-half profits to 9.99 billion naira and raised its return on equity (ROE) target for the year to 15 percent from 10 percent.
The Bank celebrated its 20th anniversary last year and also opened its new state of the art headquarters in Oniru, Victoria Island.
reporting for easykobo.com on Thursday, Aug 9 2012 from Lagos, Nigeria