LAGOS (Reuters) – Nigeria’s Diamond Bank is quitting other West African markets to focus efforts at home and deploy its resources on personal banking business in Africa’s biggest economy, it said on Friday.
The move by Diamond Bank <DIAMONB.LG> ends the mid-tier lender’s 18-year push abroad.
Several Nigerian banks expanded abroad than a decade ago, encouraged by rising commodity prices and seeking to capitalize on a growing middle class in the region. But prospects have dimmed with a sharp fall in commodity prices since mid-2014 that triggered currency crises in some markets and turned loans sour.
“After 18 years of building the Diamond Bank franchise in other markets in West Africa, the time has come to fully apply our resources to Nigeria,” Diamond Bank Chief Executive Uzoma Dozie said in a statement.
It said it wanted to apply its resource to Nigeria to develop a profitable technology-driven retail banking business.
The bank said on Friday it had agreed to sell its operations in Benin, Togo, Cote d’Ivoire and Senegal to a Cote d’Ivoire-based financial services company Manzi Finances S.A. for 61 million euros. It expects the deal to close this year.
Diamond Bank posted a 71.5 percent rise in nine-month pretax profit to 6.67 billion naira in September.
Several Nigerian lenders have adapted their business models after low crude prices put pressure on the once lucrative oil and gas loan book. Nigeria exited recession in the second quarter but growth is fragile.
Dozie said Nigeria’s unbanked population and the rise of cost-effective digital banking platforms provided it with the opportunity to reach millions of customers in a market where it already had over 15 million clients.
Diamond shares, which have risen 15 percent so far this year, climbed 5 percent on Friday to 1.06 naira. They had fallen 62 percent last year.
Last year, the bank said it was conducting a capital management plan and would ensure it met regulatory requirements, adding that it was considering raising fresh capital and selling some assets to strengthen its capital base.
(Reporting by Chijioke Ohuocha; Editing by Edmund Blair)