Diamond Bank is among the region's newest and most ambitious players and has a unique take on the Nigerian banking arena. Can you explain how it fits into the larger banking sector?
Diamond Bank started by building a platform that would enable people to transfer from one place to another in real time. The middle market, which is mostly trade across Nigeria, was physically carrying cash from one place to another to exchange. This helped drive our business and acquire new customers in a short space of time.
Last year, Caryle Group took a stake in Diamond, its first in any Nigerian business and one of the largest private equity transactions in Africa last year. What is the significance of that level of investment from an internationally recognized private equity firm in the Nigerian banking space?
There is strength in the Carlyle brand, which gives us global respect. Carlyle is one of the biggest private equity firms that has invested in Africa, after doing their due diligence, and so that speaks volumes. That allows us to leverage their global reach. They made an equity investment, and their goals are to continue to optimize our technology and to increase our footprint. In terms of branches, we have covered most of Nigeria, but we will invest in modernization, ATMs, and connectivity. Once the majority of our customers no longer feel that they need to come to the bank to perform transactions, they are going to be used for advisory services. It is particularly through SME customers that we are trying grow; access to advisory services and markets will ensure that they are sustainable and help them build that capacity from a governance perspective.
What strategic decisions have contributed to your first-half financial results?
Quite a few regulatory policies came into play, and there were three in the first half of the year. The cash ratio played a large role in the harmonization of private and public sector funds, which hurt us due to our portfolio. And then of course, the new foreign exchange laws have not helped. We command quite a lot in terms of the trade and business that goes on, and there has been a vast drop in trade as a result of the availability of funds, especially in light of the economic situation and the drop in oil prices. We have a diverse customer base and customer business and do not have extensive public sector involvement. Meanwhile, we have also observed that our mobile business channel will help us withstand any shocks to the system.
You have invested in mobile technology and are recognized as a bank in West Africa with a unique approach to that concept. What is the way forward?
We cater to mainstream customers numbering 4.5 million, half a million of which have signed up for mobile banking. We intend to reach the million mark by the end of this year, and double that by the end of 2016. The cost of the internet is declining, as is that of smartphones, and we are even lending to facilitate acquisition. An interesting example of our strategy is Better Proposition, a product mainly aimed at women. When travelling around Lagos, or indeed elsewhere in Nigeria, one comes across markets where women hold the authoritative role. We find in many cases that while they may be close to brick-and-mortar branches, they never enter a bank. In fact, they lack a bank account, relying instead on an informal system fraught with high interest rates and uncertainty. What we did was displace this with inclusion in the formal financial system by taking the bank to them. We built a proposition whereby we hired and trained sales agents, and built a cloud-based banking application to be linked to our main server, and then signed up customers with Interswitch to then be followed up with a SIM card-based bank card. We launched it 24 months ago and today have 200,000 customers, according to 100 branch locations, with over NGN3 billion in total balances and an engagement rate of 97%, where the average balance is comparable to mainstream savings account holders; all of this was done through mobile banking. What we are trying to do with our banking and application perspective is to go beyond banking, particularly with our mobile app.