Diamond Bank: 2016 financial year remains challenging

According to a Statement from Diamond Bank, the 2016 financial year will no-doubt remain challenging, as the fundamentals that drag economic growth are expected to persist in the short to medium term.CNBC Africa’s Didi Akinyelure spoke to Uzoma Dozie, CEO, Diamond Bank at the company’s annual general meeting.

DOZIE: I think the customers are the centre of the foundation we are laying. So it’s a question of how do we make it easier for them and how do we make it more cost effective? To summarise what we are doing, we are actually trying to give customers choices of how they do business with us. We are trying to go beyond banking by not just providing financial services but how do we partner with players with the industry to bring a better bundle solution, a classic example will be our collaboration with MTN to provide banking services on mobile phones. We are also talking to partners in technology like Microsoft, Samsung, how do we bundle solutions to take to places like schools and small businesses? We have partners like Google and we are going beyond registration of businesses to giving a digital identity.

So beyond our platform which has banking services, we now have more customers and increase of deposits despite the challenges of last year, more transactions are being done through Diamond bank as a result of a platform that enables customers to easily come on board and do their transaction and also to benefit from our relationship with our partners in the ecosystem.

Your thoughts on the Macro environment that we are in, especially given the hike in inflation and the Q1 GDP numbers that came out and  the news of a flexible Forex market coming up.
DOZIE: It makes forecasting very difficult and there is a lot of uncertainty. For us, it is how do we create some certainty? The most important thing for us is to make sure we have enough capital to absolve the shock in the system, liquidity to provide solution as at when due and then to make sure that we provide a platform for our customers to do things and go about their businesses. We see more uncertainty as we go on, because Nigeria is not only experiencing internal shocks, external shocks also affect us as we are now part of the global market. So for us, it is making sure that the fundamentals that we have put in place are there to insure some certainty.

As you know, we are a Pan African channel; let’s talk about the other Diamond bank subsidiaries, because we tend to talk about Diamond bank in Nigeria, so how are these Diamond bank subsidiaries doing so far this year.
DOZIE: While Nigeria is growing at a GDP of close to 2 percent, we are seeing Cote D’Ívoire and Senegal in excess of 5 percent, and a lot of activities going on there, so we are now taking our value propositions to those areas and we are also learning from that space, in areas like Cote D’Ívoire where they’ve had a lot of political and economic  stability, we are now beginning to see a lot of commerce there and we are getting more customers coming to our platform in those areas and they are beginning to contribute more to the Diamond bank franchise.

Giving the challenging business environment that we are in, what do banks need to do to stay competitive and what sets Diamond bank apart?
DOZIE: For us to thrive in this environment, in fact, the African space, we have to go beyond the traditional banking services, so it means first of all, having an idea of what you want to provide for your customers. For us, it is beyond banking services, it is what our customers will become tomorrow. Our customers are going to be digital and mobile; in that case, you have to lay that foundation for such people, it means that your process will change, the type of people that you hire will change, it also means the style, the culture and the philosophy of banking completely changes.

That’s where we are different from everyone as we know that banking is a commodity and it will always be important to people but how it is done will be completely different. In Diamond bank today, 80% of our customers don’t come to bank, they actually do transaction from mobile phone. We have 1.2 mobile customers and we have costumers at the bottom of the pyramid who have never being to a bank, who have never filled the account from, they do it on their mobile.  I know that my children are never going to go to a bank to open an account, they are going to expect banking to be automatic and that is where we see our business going and those are the foundations we are building.

The important things for investors of course are your earnings. So what can we expect from Diamond Bank going forward?
DOZIE: The investors expect returns on their investment; they also expect to see the fundamentals that will assure them.  For instance, the organisation has a business module that makes sense in this space, we also have the right type of people from the board and government perspective and especially, in this kind of market, you need to have an organisation that has strong governance from people perspectives.

I think that’s what diamond bank has and as I said earlier, the capital and liquidity to go through this hard time. If those things are there, I think beyond 2016, we shall begin to reap the benefits of these investments.