A Nigerian Diamond is NOT Forever

The “collapse” (officially, it is a merger with Access Bank, or maybe we should say, it was saved from collapse in the nick of time) of Diamond Bank is inevitable; it was bound to happen.

Remember, just a few months ago, Skye Bank, which had been in distress since a few years ago, was quickly subsumed to become Polaris Bank. Believe it or not, some other Nigerian banks are edging towards the same fate too, all due to greed, malpractice, underhand practices, unethical dealings, corruption, nepotism, mismanagement and pure idiocy.

It is a story of Nigeria and its dodgy, mediocre and corrupt “businessmen” and “corporate titans” as we like to dub them. It is a story of impunity and a disregard for the life and comfort of investors and depositors. And, in most cases, these dubious bank executives always get away with it (Forget about Mrs Cecilia Ibru and Mr Erastus Akingbola, who were just unlucky to be scapegoated). And you know, all the stakeholders, including our apex bank, the Central Bank and the directors of the distressed banks always feign ignorance.

According to its listing on Wikipedia, Diamond Bank Plc., is a Nigerian multinational financial service provider. The bank provides financial services. Its headquarters is located in Lagos, Nigeria. As at June 2013, the bank operated 267 branches in Nigeria. As of December 2012, the bank's total assets were valued in excess of US$7.3bn (NGN:1.7 trillion) And its leadership (that is, Directors running the bank, are listed as thus: Uzoma Dozie is the CEO. The other board of directors are Mrs. Caroline Anyanwu, Mrs. Chizoma Okoli, Mr. Chiugo Ndubisi, Mr. Kabir Alkali Mohammed, Mr. Damian Dolland, Mr. Dele Babade, Mr. Christopher Ubosi, and Mr. Idris Mohammed.

Diamond Bank commenced operations as a commercial Bank in 1991 and it was indeed one of the most sought after "New Generation Banks" by those who desired a career in banking and those who wanted to take their businesses to the next level. In the nineties the bank could boast of having the best of seasoned bankers in the industry.

A very good rapport existed between the management and staff of the bank and it was considered by all staff to be a safe place to pursue a great banking career.

Unfortunately, in the mid-2000s, signs of a crack began to gape open, as the priced values of the bank began to appear, as sycophancy and favouritism began to creep in under the watch of Emeka Onwuka as the erstwhile MD and his executive team including Uzoma Dozie, who had after less than 5 years in the bank became an Executive Director. At this time, he was being groomed to take over as the MD.

Recently, around November 2018 ending, it was widely announced that Diamond Bank Plc, Nigeria’s fastest growing retail bank, has received the approval of the Central Bank of Nigeria following its application to operate as a National Bank with immediate effect (subject to conclusion of the sale of Diamond Bank UK- DB UK Plc). With this approval, they said, the bank will cease to operate as an International Bank. According to the release, the re-licensing as a national bank supports Diamond’s objective of streamlining its operations to focus resources on the significant opportunities in the Nigerian retail banking market, and economy as a whole, and the move follows Diamond’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. The change to national bank status also enables the bank to maintain a lower minimum capital requirement of 10% as against 15% required for international banks. This, the announcement further said, will create room for the bank to deploy more capital for stronger growth in the quarters ahead through additional investment in technology platforms, customer acquisition and expansion of loans to the critical sectors of the economy.

Uzoma Dozie, CEO, said: “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”.

The astute person in the banking and financial sector of Nigeria will easily see through the smokescreen and the attempt to cover up the real issues or problems of Diamond Bank by its directors, and by even the Central Bank of Nigeria.

Being licenced as a National Bank was just a nice way of disguising the fact that they wound up all international businesses. They closed all their offshore branches and sought approval to operate just within Nigeria. Hence, the licence granted to operate as a National bank. This was the first step.

Everybody working in the bank, or who has ever worked in the bank knew the bank could end up messed up when Uzoma, Pascal’s son was made MD against better judgement.

1. He never wanted to be a banker, but the family wanted him there as the first son, so his time there was accelerated and in less than 5 years, he was made an executive director without the requisite experience.

2. The Dozie family ran the bank like a personal account and treasury. Bank funds were used to build residences, multi-million Naira office complexes and all kinds of self-adulating edifices. In fairness to the Dozies, this kind of attitude of regarding and running a bank as a personal treasury to dip their hands into whenever they like, is a trademark of most so-called “New Generation” banks in Nigeria which were originally founded by individuals or a group of individuals.

3. There was an Executive Director (name withheld), a very good friend of Uzoma and seasoned banker who made a personal decision to guide his friend until he could garner enough experience, unfortunately he was removed by the family when he began to question the personal spending etc. He was the only one who ever questioned the Dozie’s and refused to sign off on so many personal spending. Of course, that didn't go down well with the Dozie Family, so he was removed. Alex Otti who was also brought in as MD was removed after his first tenure as he was seen as being high handed.

Then Uzoma became MD with all his inexperience and immaturity and the bank could only go one way – DOWN!!!

The foreign investors at the time pulled out as they were no longer comfortable with the way the bank was being run. Performance began to decline, share prices fell etc. So, they went shopping for another investor and found one. After a short year, the new investors were quickly to see that their investments were not yielding desired results and decided to pull out.

Now the Dozie family has always been the highest shareholders. They on a personal capacity went looking for capital to buy the foreign investment and Access Bank was the only bank ready to grant the Dozie Family any funding on a personal capacity. By this time, the Board was in disarray as they were not comfortable with what was going on.  The Chairman and 3 directors resigned. This, of course, caused immediate problems for the bank that wasn't doing well.  Share prices crashed etc. Bad loans granted particularly in the oil sector grew into billions of Naira.  And in all this, Uzoma was still exhibiting his immaturity. His good hands that tried to advise him were told to resign or he removed them.

So, it was time to pay back the loan and it couldn't be paid back. It is generally believed that the Dozies could have paid back their loan in their personal capacity but decided to mortgage the bank instead (nobody plays with their own personal money, especially ill-gotten gains). This enables them to keep their own billions and still retain majority shareholding in Diamond Bank. So rather than pay back, the loan was made to be Diamond Bank’s(corporate) loan. All parties then agreed that since the loan couldn't be repaid, Access Bank will acquire Diamond Bank. And that's exactly what happened.

Unfortunately, the losers here are the staff of Diamond Bank, and of course, the poor little investors holding Diamond Bank shares (like me).

1. Uzoma can now stop pretending and face his life of playing golf and having a good time. And of course, his billions are still intact.

2. The Dozies still have a huge chunk of shareholding in the new bank so they are all smiling to the bank, in this case, Access Bank.  Now they can all do whatever they want. They have a massive and beautiful office complex in Ikoyi built with bank funds (this was built a long time ago). All of them Mum, Dad and the 5 sons have offices there doing what nobody really knows.

We haven't heard the last of it though. A group of shareholders of long standing have been quite vocal against all this. In fact, one of them Mazi Clem Onwunna who had always been vocal at board meetings against the Dozies is set to go to Court. Nobody knows how successful he will be though. These are people who saw through the Dozies as far back as when the elder, Dozie, Pascal was still on the board.

So that is the end of that brand, unhappily. It's sad that a brand that was an envy of all had to go this way. It's even more horrific that a lesser brand such as Access Bank, (remember, Erastus Akingbola’s Intercontinental Bank metamorphosed into Access Bank, after its collapse) a bank that was not classified as a peer bank of Diamond in its golden years is now the bank that has acquired Diamond Bank. That's what greed and selfishness can cause.

“Diamonds”, they say, “is Forever”, meaning that a diamond is a never-ending (sign of love). It also meant that a diamond would always keep its value; unfortunately not here in Nigeria, they ain’t!