Diamond Bank Shareholders Rebuke Board Over N7.99m CBN Fine

The shareholders made their position known at the bank’s 23rd Annual general Meeting, AGM, in Lagos.
Shareholders of Diamond Bank on Thursday expressed dissatisfaction over the N7.99 million paid by the bank as penalties to the Central Bank of Nigeria, CBN, in 2013.
The shareholders made their position known at the bank’s 23rd Annual general Meeting, AGM, in Lagos.
The News Agency of Nigeria reports that the bank, during the financial year ended December 31, 2013, was penalised by the CBN for several infractions.
A breakdown of the infractions showed that the bank paid a fine of N2 million for the delay in refunding a customer the sum of $827,223 as directed by the Central Bank.
It was fined N4 million for promoting two senior management personnel without the approval of the Central Bank.
The bank also paid penalty of N1.99 million for withholding a customer’s funds for 26 days after the promoters of the customer had written to inform the bank that they were no longer interested in a facility.
Speaking at the AGM, Sunny Nwosu, National Coordinator, Independent Shareholders Association of Nigeria (ISAN), urged the bank to “stop working for CBN”.
Mr. Nwosu said that the bank should be more careful in the future to avoid waste of shareholders’ funds.
“The board should be careful not to waste shareholders’ funds in meeting CBN sanctions,” Mr. Nwosu said.
He also described as worrisome the N7.4 billion spent by the bank on advertising and promotions during the period under review.
Mr. Nwosu said that the bank should be more prudent, stressing that such funds could be converted to dividend payable to shareholders.
Another shareholder, Nona Awoh, described the bank’s dividend of 30k as paltry.
Mr. Awoh said that shareholders should be compensated with enhanced dividend instead of spending N7.4 billion on advertisement.
The shareholders, however, approved the payment of 30k dividend proposed by the bank.
They also authorised the board and management to float rights issue of $500 million or its naira equivalent to support the bank’s operations.
Alex Otti, the bank’s Group Managing Director, said that the additional capital would make the bank to be more competitive.
Mr. Otti said that the N7.4 billion spent on advertising and promotion included the rebranding and restructuring programme embarked upon few months ago.
He said that advertising was part of business and should not be neglected if the bank wanted to remain in business.
Mr. Otti said that the rebranding exercise made the bank to be more visible and competitive.
“We might go back to where we are coming from if we are not careful,” he said.
He, however, assured the shareholders that dividends would be paid annually.
The bank posted gross earnings of N181.2 billion against N138.8 billion achieved in 2012.
Profit after tax stood at N28.5 billion compared with N22.1 billion recorded in 2012.