Diamond Bank seeks deposits to offset tougher Regulatory rules.

Diamond Bank Plc is planning to boost customer deposits to offset the impact of tougher regulatory requirements on earnings, Bloomberg has reported.

Higher Cash Reserve Requirements imposed by the Central Bank of Nigeria crimped profit last year by N3bn, the bank’s Chief Financial Officer, Mr. Abdulrahman Yinusa, said.

“It did affect us,” Yinusa said, adding, “Higher volume of customer deposits will help us to reduce the effect.”

The Central Bank of Nigeria had increased CRR on public sector deposits to 75 per cent from 50 per cent last year and also told lenders to lower fees and commissions to reduce costs to customers.

The CBN had also raised requirements on private deposits to 15 per cent from 12 per cent on March 25 to reduce liquidity and support the naira.

Customer deposits rose by almost a third to N1.2tn last year, helping to boost Diamond Bank’s profit by about 29 per cent to N28.6bn, according to March 28 filing to the Nigerian Stock Exchange.

The lender planned to grow its loan book by 10 per cent to 15 per cent this year, with the bulk of that going to finance upstream oil and gas as well as telecom assets, Yinusa said.

Return on equity was targeted from 25 per cent to 30 per cent against 22 per cent in 2013, while return on assets was projected to climb to about five per cent from 4.5 per cent, he said.

-punch

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