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As Nigeria's banks suffer from the collapse in oil prices, Diamond Bank CEO Uzoma Dozie looks to set the bank on a new path.
In 2015, Diamond Bank's profits fell off a cliff. Back in 2014, its profit before tax was a respectable N24.4bn ($8 6.4m at current exchange rates). In 2015, profit plummeted to just over Nsbn. When the bank's financial statement was made public towards the end of March, its share price suffered a similar fate, falling to an all-year low of N1.15. Things weren't looking too good for the second-tier Nigerian bank.
"The main reason for the dropoff in our profits were impairments due to the fall in the oil and gas price and our exposure to the sector," says Uzoma Dozie, the bank's chief executive.
"Were we overexposed to the oil and gas sector? Perhaps we were. But Nigeria itself is overexposed and highly concentrated in these sectors. The country relies on oil for trade imports, on oil for building foreign currency reserves and on oil for propping up the budget. Eighty per cent of total loans by banks in Nigeria go to less than 100 companies in Nigeria. Just think about how limited that is. It's a highly concentrated country in many ways. So yes, we may have been overexposed to the oil and gas sector from a bank perspective, but from a Nigeria perspective, I don't think we were."
Despite a rebasing exercise back in 2014 which declared it Africa's largest economy and asserted that the country was a lot more diverse than originally thought, Nigeria remains highly reliant on oil, which accounts for around 70% of government revenue. Nigerian banks fuel business in...