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Actis Invests N17bn in Diamond Bank

Category: Investors NewsBeat

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Actis Invests N17bn in Diamond Bank

February 15, 2007/ThisDay


As a demonstration of confidence in Diamond Bank Plc and the Nigerian economy, an international consortium led by Actis Capital LLP, as strategic investor, has made a commitment to inject $130 million (N16.7 billion) in the Bank.



The equity investment, which has received the endorsement of both Actis Investment Committee and the Board of Directors of Diamond Bank, is however, subject to the approval of the Bank’s shareholders and the regulatory authorities.


Actis is a leading private equity investor with special focus on emerging markets. The institution has operated for over 50 years in Africa and other emerging markets via its origins with Commonwealth Development Corporation (CDC), owned by the British Government. Today, Actis is a private equity investor in emerging markets with funds under management of US$3.4 billion, for investors including the British and Canadian Governments as well as 32 other international institutional investors. Actis has significant investments across Africa, China, South Asia, and South East Asia. In Nigeria, Actis currently has diverse investments including in Starcomms, UAC of Nigeria Plc and The Palms Mall in Lagos.


Underpinning this investment is the success of the reform programme of the Federal Government which made possible the BB country rating that Nigeria received from two international rating agencies - Fitch Ratings and Standard & Poor’s; last year. The ratings opened the door for increased foreign investment in the country.


Analysts believe that the pioneering international partnership is a direct result of the consolidation and reform in the Nigerian banking sector driven by the Central Bank of Nigeria (CBN), and the exciting prospects for Diamond Bank within the evolving sector. The strength of Diamond Bank post-consolidation and the business prospects arising from the economic reforms of the government must have been some of the major attractions for Actis investment.


Actis has considerable banking industry investment experience both in Africa and Asia. It is the leading institutional investor in two African banks, DCFU (Uganda) and BCR (Rwanda). In India, Actis was the leading institutional investor in UTI which has since been acquired by HSBC. Actis is presently leading a US$1.1 billion investment in Alexander Forbes of South Africa (risk management and insurance brokerage), the largest ever financial services buyout investment in Africa.


These banking industry investments are supported by a specialist financial services team within Actis with leading edge industry experience and a broad sector understanding ranging from retail banking (mortgage business and consumer lending) to asset management. Consequently, the Bank will benefit immensely from Actis deep specialist bank consulting experience and network; strong connections to international banks with considerable insight into cutting-edge banking strategy; and detailed understanding of successful trends in emerging markets financial business models.


The partnership is also expected to facilitate the Bank accessing long-term debt funding and Tier 2 capital, by leveraging on Actis international alliances and joint ventures. In addition, Actis will assist the Bank in maintaining very high standards of corporate governance in line with the CBN code of corporate governance and international best practice.


This development reaffirms Diamond Bank’s determination to build a strong financial services institution that has the capacity to create and deliver superior customer value at all times. Having established itself as one of the leading financial institutions in the country, the Bank has been implementing a series of internal and external strategic initiatives aimed at expanding its reach, growth prospects and entrenching its position on the financial landscape of the country. Among such earlier initiatives are the introduction of Diamond Minis and the strategic acquisition of Lion Bank Plc to strengthen the Bank’s retail business focus.


In addition, the Bank’s subsidiaries in the non-bank financial services sub-sector, including Diamond Pension Fund Custodian Limited (Diamond PFC), Diamond Mortgages and ADIC Insurance, will enable it provide excellent services to meet the comprehensive financial services needs of its customers nationwide.


The partnership between Actis and Diamond Bank will, no doubt, facilitate the achievement of the Bank’s business development objectives and maximisation of shareholder value/returns. This will boost the high profile of the Bank, which has attracted very good credit ratings from local and international rating agencies, i.e. A from Fitch Ratings, A+ from Agusto & Co. and AA- from Global Credit Rating Company. It is expected that the value addition from this partnership will further move the Bank upwards on credit rating scale. - ThisDay

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