Carlyle Group Holds 18% Stake in Diamond Bank

Following the investment of $147 million in Diamond Bank Plc by the Carlyle Group, the Washington-based financial institution currently has 18 per cent stake in the Nigerian commercial bank, a report revealed Tuesday.

The investment was made possible through the company’s purchase of Diamond Bank’s recent rights issue.

The 18 per cent stake is however higher than the 14.8 per cent previously held by Actis.

Commenting on the transaction, Banking Analyst at Renaissance Capital, Mr. Adesoji Solanke described it as positive for Diamond Bank’s equity story.

“To acquire such a

decent size stake in the bank, we think Carlyle acquired part or fully the rights attributable to Kunoch post the latter’s acquisition of the Actis stake, and possibly picked up some additional shares via traded rights on the exchange.

“Actis had two board seats and we believe with Carlyle holding an even bigger stake, should get at least two board seats. We do not know Kunoch’s shareholding post the rights issue,” he added.

He however pointed out that the deal would further strengthen the composition of Diamond Bank’s.

“We note that it has been strengthened significantly over the past three years, which we think should be positive for corporate governance.

“In our view, it will be for the new CEO to competently drive-through the bank’s strategy and deliver decent shareholder returns on an improved corporate governance and asset quality base going forward, which we think investors will benchmark against the bank’s performance under the previous CEO,” he stated.

The Group Managing Director/Chief Executive Officer (Designate) of Diamond Bank, Mr. Uzoma Dozie has expressed belief that the investment by the company was a testament of the bank’s strong brand and success over the years, particularly in the retail/SME space. He also expressed confidence that they would bring unique values to their involvement with the bank, assuring that it would fruitful and beneficial to all stakeholders.

“Particularly, Diamond Bank stands to benefit from Carlyle’s extensive network of financial services specialists as it continue to strengthen its market position, expand commercial and retail offerings, and further enhance operations,” Dozie said.

Carlyle, the world’s second-largest manager of investment alternatives to stocks and bonds, bought the stake through its sub-Saharan Africa Fund.

The Carlyle fund has invested almost $300 million in sub-Saharan countries including Nigeria, Mozambique, Zambia, Tanzania and the Democratic Republic of the Congo since 2011.

Thisday