Director's report

Strategic Report

01Directors’ Report

for the year ended
31 December 2017

The Directors present their
report on the affairs of
Diamond Bank PLC (“the
Bank”) and its subsidiaries
(“the Group”), together with
the financial statements and
auditors’ report for the year
ended 31 December 2017.


044 | Diamond Bank Annual Report 2017

Strategic Report

Directors, officers
and professional advisors

Directors Chairman
Group Managing Director/Chief Executive Officer
Prof. Chris Ike Ogbechie Deputy Managing Director/Chief Risk Officer
Mr. Uzoma Dozie Non-Executive Director
Mrs. Caroline Anyanwu Independent Non-Executive Director
Chief John D. Edozien ¹ Non-Executive Director
Mr. Ian Greenstreet ² Non-Executive Director
Mr. Kabir Alkali Mohammed Non-Executive Director
Ms. Genevieve Sangudi ³ Independent Non-Executive Director
Mr. Damian Dolland Executive Director
Mr. Rotimi O. Oyekanmi Executive Director
Mrs. Chizoma Okoli Non-Executive Director
Mr. Chiugo Ndubisi Non-Executive Director
Mrs. Aisha Muhammed Oyebode ⁴ Non-Executive Director
Mrs. Juliet Anammah ⁵ Executive Director
Mr. Dele Babade ⁷ Non-Executive Director
Mrs. Aisha Ndanusa Ahmad ⁸
Mr. Christopher Ubosi ⁶

1 Chief John Edozien retired with effect from April 30, 2017
2 Mr. Ian Greenstreet retired with effect from August 1, 2017
3 Mrs. Genevieve Sangudi resigned with effect from March 24, 2017
4 Mrs. Aisha M. Oyebode was appointed with effect from July 17, 2017
5 Mrs. Juliet Anammah was appointed with effect from July 17, 2017
6 Mr. Christopher Ubosi was appointed with effect from November 3, 2017
7 Mr. Dele Babade was appointed with effect from April 20, 2017
8 Mrs. Aisha Ndanusa Ahmad was appointed with effect from July 24, 2017



Company Secretary

Uzoma Uja
Company Secretary/Legal Adviser

Corporate Head Office

Diamond Bank Plc
PGD’s Place, Plot 4, Block V, BIS Way
Oniru Estate, Victoria Island, Lagos.
Telephone: +234 1 2701500
+234 1 2620740-9

Email: [email protected]
Website: www.diamondbank.com

Independent Auditor

KPMG Professional Services
KPMG Tower, Bishop Aboyade Cole Street,
Victoria Island, Lagos
Telephone: +234 271 8955
Website: www.ng.kpmg.com

Registrars

Centurion Registrars Limited
33c Cameron Road
Ikoyi, Lagos.
Telephone: +234 704 535 5922

Diamond Bank Annual Report 2017 | 045

Strategic Report

Directors' Report
Continued

a. Legal form purpose of providing subordinated foreign currency loans
to Diamond Bank Plc by issuing Loan Participatory Notes to
“Diamond Bank was incorporated on December 20, 1990, interested investors.
and opened for business in March, 1991 as a Private Limited
Liability Company. In February 2001, the Bank became a During the year, the Bank divested its 97.07% stake in
universal bank. In January 2005, following a successful Diamond Bank S.A. The divestment is part of the Bank’s
Private Placement and an Initial Public Offer (IPO), the Bank plan to align its business operations to its long-term goal of
became a Public Limited Company and was subsequently strategically focusing on the significant opportunities in the
listed on the Nigerian Stock Exchange in May 2005. In Nigerian market (see note 47 for details)
October 2005, the Bank acquired former Lion Bank of
Nigeria Plc. The Bank was also listed on the Professional Diamond Bank’s strategic objective is to be the fastest
Securities Market of the London Stock Exchange in 2007, growing and most profitable technology driven retail
following a successful US$500 million GDR offering. In banking franchise in Nigeria. This strategic intent requires
2013, following the Central Bank of Nigeria’s regulation the Bank to optimize the use of its resources which means,
repealing the universal banking model, Diamond Bank where necessary, divesting from its non-core assets, and
converted its license to an international commercial focusing on the priority area, namely Nigerian retail banking.
banking license.
Further to this, the Directors committed to a plan to
b. Principal activity and business review dispose of the Group’s investment in Diamond Bank UK.
Accordingly, the subsidiary has been presented as a disposal
The principal activity of the Group continues to be the group held for sale. Efforts to sell the Group has been on-
provision of banking and other financial services to going and a sale is expected by year 2018.
corporate and individual customers. Such services include
granting of loans and advances, corporate finance and c. Operating results
money market activities. The Bank currently has one
operating subsidiary: Diamond Pension Fund Custodian Gross earnings of the Group from continuing operations
Limited in which it has 100% ownership, and a special increased from N184.1 billion to N189.6 billion and profit
purpose vehicle, Diamond Finance BV. The Bank’s before income tax from continuing operations decreased
consolidated financial statements include the results from N3.4 billion in 2016 to a loss of N11.5billion during the
of the operating subsidiary. year ended 31 December 2017.

Diamond Finance B.V. was incorporated on 26 February Highlights of the Group’s operating results for the period
2014 as a Structured Entity in the Netherlands for the under review are as follows:

For the year ended 31 December Group Restated Group Bank Bank
In thousands of naira 2017 2016 2017 2016

Gross earnings 189,622,137 184,056,357 203,348,983 187,279,015

(Loss)/profit before income tax (11,546,952) 3,368,578 2,190,907 3,290,487

Minimum tax (1,310,230) (1,287,864) (1,299,774) (1,287,864)

Income tax expense (39,345) (80,436) (21,692) (32,579)

(Loss)/profit for the year from continuing operations (12,896,527) 2,000,278 869,441 1,970,044

Profit from discontinued operations net of tax 3,885,313 1,498,687 - -

(Loss)/profit for the year (9,011,214) 3,498,965 869,441 1,970,044

Non-controlling interest (73,759) (27,826) - -

(Loss)/profit attributable to group shareholders (9,084,973) 3,471,139 869,441 1,970,044

Earnings per share from continuing operations

Basic (loss)/ earnings per share (kobo) (56) 9 4 9

Diluted (loss) earnings per share (kobo) (56) 9 4 9

Earnings per share from total operations

Basic (loss)/ earnings per share (kobo) (39) 15 4 9

Diluted (loss) earnings per share (kobo) (39) 15 4 9

Total equity 223,312,957 226,707,963 213,563,961 211,336,909

046 | Diam ond Bank A nnual Repo rt 2017

Strategic Report

Directors' Report
Continued

d Directors and their interests

The direct and indirect interests of directors in the issued share capital of the Bank as recorded in the register of directors’
shareholding and/or as notified by the directors for the purposes of sections 275 and 276 of the Companies and Allied
Matters Act and the listing requirements of the Nigerian Stock Exchange is noted below:



Direct Shareholding Indirect Shareholding

Prof. Chris Ogbechie (Chairman) Number of 50k Number of 50k Number of 50k Number of 50k
Mr. Uzoma Dozie (Managing Director) ordinary shares ordinary shares ordinary shares ordinary shares
Mrs. Caroline Anyanwu (Deputy Managing Director/CRO)
Mrs. Chizoma Okoli (Executive) held Dec-17 held Dec-16 held Dec-17 held Dec-16
Mr. Chiugo Ndubisi(Executive)
Mrs Aisha Ndanusa Ahmad ⁸ (Executive) 16,047,124 16,047,124 - -
26,489,005 26,489,005 848,872,310* 848,872,310*
Chief John D. Edozien ¹ 6,330,000 4,080,000
Mr. lan Greenstreet ² - -
Mr. Kabir Alkali Mohammed 2,347,234 2,297,124
Ms. Genevieve Sangudi ³ 1,509,210 1,509,210 - -
- -
Mr. Dele Babade ⁷ - - - -
Mr. Damian Dolland
Mr. Rotimi Olayiwola Oyekanmi 16,783,520 16,783,520 227,700*** 227,700***
Mrs. Aisha Muhammed Oyebode ⁴ - - - -
Mrs. Juliet Anammah ⁵
Mr. Christopher Ubosi ⁶ 8,784,519 6,841,519 227,700*** 227,700***
- - - -
- -
4,110,118,107**** 4,110,118,107****

- - 2,141,349,189** 2,141,349,189**
-
- - --
-
184,200 - --
- --

--

1 Chief John Edozien retired with effect from April 30, 2017
2 Mr. Ian Greenstreet retired with effect from August 1, 2017
3 Mrs. Genevieve Sangudi resigned with effect from March 24, 2017
4 Mrs. Aisha M. Oyebode was appointed with effect from July 17, 2017
5 Mrs. Juliet Anammah was appointed with effect from July 17, 2017
6 Mr. Christopher Ubosi was appointed with effect from November 3, 2017
7 Mr. Dele Babade was appointed with effect from April 20, 2017

8 Mrs. Aisha Ndanusa Ahmad was appointed with effect from July 24 ,2017

* Represents Kunoch Limited
** Represents Kunoch DB Limited
*** GDR Holding
**** CSSAF DBN Holding

In accordance with the provisions of the Articles of Association of the Company, Mr. Kabir Alkali Mohammed, Mr. Damian
Dolland, Mr. Rotimi Oyekanmi and Mr. Dele Babade, retire by rotation and being eligible, offer themselves for re-election.


Diamond Bank Annual Report 2017 | 047

Strategic Report

Directors' Report
Continued

e. Directors’ interest in contracts

For the purpose of section 277 (1) and (3) of the Companies and Allied Matters Act of Nigeria, none of the directors had
direct or indirect interests in contracts with the Bank during the year, except:



Related Director Interest in entity Name of Company Services to the Bank

Mr. Uzoma Dozie Director Elpina Associates Limited Supply and Maintenance

Chief John D. Edozien Director Mercedes Benz Automobile Services Ltd Supply and Maintenance



f. (i) Shareholding analysis

The shareholding pattern of the Bank as at 31 December 2017 is as stated below:


31 December 2017

Share Range No. of Percentage (%) of No. of Holdings Percentage (%)
Shareholders Shareholders Holdings

1 - 10,000 91,255 78.80 193,384,877 0.83

10,001 - 50,000 15,743 13.59 310,830,659 1.34

50,001 - 100,000 4,546 3.93 295,865,315 1.28

100,001 - 500,000 3,235 2.79 626,808,990 2.71

500,001 - 1,000,000 411 0.35 300,577,739 1.30

1,000,001- 5,000,000 426 0.37 878,628,004 3.79

5,000,001 - 10,000,000 71 0.06 503,664,247 2.17

10,000,001 - 50,000,000 72 0.06 1,556,250,389 6.72

50,000,001 - 100,000,000 15 0.01 1,096,123,992 4.73

100,000,001 – 500,000,000 24 0.02 5,520,094,821 23.83
20.13
500,000,001 - 1,000,000,000 7 0.01 4,661,935,093 31.16
100.00
1,000,000,001 - 10,000,000,000 3 0.00 7,216,224,842
Percentage
TOTAL 115,808 100.00 23,160,388,968 Holdings
0.84
1.35
1.26
31 December 2016 2.57
1.04
Share Range No. of Percentage (%) of No. of Holdings 3.21
Shareholders Shareholders 1.93
6.50
1 - 10,000 91,193 78.89 193,505,338 4.61
26.18
10,001 - 50,000 15,881 13.74 313,105,347 24.23
26.28
50,001 - 100,000 4,518 3.91 292,939,676

100,001 - 500,000 3,126 2.70 594,156,379

500,001 - 1,000,000 341 0.29 241,362,803

1,000,001- 5,000,000 355 0.31 742,776,166

5,000,001 - 10,000,000 63 0.05 448,069,090

10,000,001 - 50,000,000 70 0.06 1,505,159,511

50,000,001 - 100,000,000 15 0.01 1,066,997,964

100,000,001 – 500,000,000 29 0.03 6,063,894,162

500,000,001 - 1,000,000,000 8 0.01 5,612,368,636

1,000,000,001 - 10,000,000,000 2 0.00 6,086,053,896

TOTAL 115,601 100.00 23,160,388,968 100.00



048 | Diamond Bank Annual Report 2017

Strategic Report

Directors' Report
Continued

(ii) Share Capital History


AUTHORISED SHARE CAPITAL ISSUED SHARE CAPITAL

YEAR INCREASE CUMULATIVE INCREASE CUMULATIVE CONSIDERATION

1991 25,000,000 25,000,000 25,000,000 25,000,000 Cash

1992 25,000,000 50,000,000 25,000,000 50,000,000 Cash

1993 50,000,000 100,000,000 50,000,000

1994 100,000,000 200,000,000 45,000,000 95,000,000 Bonus issue of N20million and cash deposit of N25million for shares

1995 200,000,000 19,000,000 114,000,000 Bonus issue of N19million

1996 200,000,000 38,000,000 152,000,000 Bonus issue of N38million

1997 800,000,000 1,000,000,000 412,300,000 564,300,000 Bonus issue of N412.3million

1998 1,000,000,000 156,750,000 721,050,000 Rights issue of N156.75million

1999 1,000,000,000 721,050,000

2000 1,000,000,000 721,050,000

2001 1,000,000,000 721,050,000

2002 1,000,000,000 2,000,000,000 360,525,000 1,081,575,000 Bonus issue of N360.52million

2003 2,000,000,000 1,081,575,000

2004 2,000,000,000 458,230,033 1,539,805,033 Rights issue of N458.23million

2004 1,500,000,000 3,500,000,000 513,268,327 2,053,073,360 Bonus issue of N513.26 million

2004 3,500,000,000 3,159,809 2,056,233,169 Rights issue of N3.1million

2005 3,500,000,000 981,373,342 3,037,606,511 Private placement proceed of N12.3billion

2005 1,500,000,000 5,000,000,000 420,000,000 3,457,606,511 Share exchange between Diamond Bank and Lion Bank

2005 5,000,000,000 344,197,564 3,801,804,075 IPO proceed of N4.6billion

2006 2,000,000,000 7,000,000,000 898,152,632 4,699,956,707 Private placement proceed of N17.06billion (Actis Holding Limited)

2007 7,000,000,000 1,879,699,250 6,579,655,957 GDR proceeds of N59.05 billion

2008 3,000,000,000 10,000,000,000 657,965,596 7,237,621,553 Bonus issue of N657.96 million

2009 10,000,000,000 7,237,621,553

2010 10,000,000,000 7,237,621,553

2011 10,000,000,000 7,237,621,553

2012 10,000,000,000 7,237,621,553

2013 5,000,000,000 15,000,000,000 7,237,621,553

2014 15,000,000,000 4,342,572,932 11,580,194,485 Rights issue of N50.4billion

2015 15,000,000,000 11,580,194,485

2016 15,000,000,000 11,580,194,485

2017 15,000,000,000 11,580,194,485



g. Property and equipment

Information relating to changes in property and equipment is provided in Note 28 to the financial statements.

Diamond Bank Annual Report 2017 | 049

Strategic Report

Directors' Report
Continued

h. Substantial interest in shares

According to the register of members as at 31 December 2017, no shareholder held more than 5% of the issued share capital
of the Bank except the following:


31 December 2017 31 December 2016

Shareholders Number of shares Percentage of Number of Percentage of
held Shareholding (%) shares held Shareholding (%)

CSSAF DBN Holdings 4,110,118,107 17.75 4,110,118,107 17.75

Kunoch DB Limited 2,141,349,189 9.25 2,141,349,189 9.25

Stanbic Nominees Nigeria Limited 1,973,872,451 8.52 2,777,091,881 11.99

Diamond Partners Limited 1,411,694,266 6.10 1,411,694,266 6.10





i. Charitable contributions



The Bank made contributions to charitable and non-political organizations amounting to N519 million (December 2016:

N353 million) during the year. The schedule of charitable donations is shown below:



Donation and sponsorship Amount

The Nigerian Police Fund 180,080,000

Imo State University Hall Remodeling 49,875,000

Education and Youth Development 33,383,979

Sponsorship of Lagos Business School (LBS) Amphitheartre Building 25,000,000

Building Enterpreneurs Today (BET) Project 20,650,000

The Vision of the Child Project 20,500,000

Public Health and Welfare 19,130,000

Sponsorship of Women World Banking Summit 18,600,000

Entertainment Industry Development 17,500,000

Federal Road Safety Corps 14,786,473

Sports and Cultural Development 12,446,700

MSME Development 7,650,000

Sponsorship of National Security Summit 7,500,000

FSD Africa Funded Project 2017 7,128,000

The Bankers Committee 6,447,508

Sponsorship of Inspire Africa Special Publication 5,904,000

Sponsorship of Golf Tournament 5,650,000

Sponsorship of Women in Management, Business And Public Service (Wimbiz) Conference 5,090,000

Sponsorship of Edo State Investment Summit 5,000,630

Sponsorship of The Beauty Souk Fair 5,000,000

Sponsorship of 2017 IFI World Design Congress 5,000,000

Sponsorship of Music conference 5,000,000

Sponsorship of Nigerian Economic Recovery Agricbiz Summit 5,000,000

Sponsorship of CBN Cashless Expo 2017 4,500,000

Sponsorship of Nigeria Art Market Report 3,400,000

Nigeria Stock Exchange (NSE) Corporate Challenge 2017 3,000,000

050 | Diamond Bank Annual Report 2017

Strategic Report

Directors' Report
Continued

Donation and sponsorship Amount
Sponsorship of Goldtent Annual Conference 3,000,000
Sponsorship of Vanguard Life Achievements Award 3,000,000
Sponsorship of Art Exhibition 2,860,000
Sponsorship of Nigerian Electronic Fraud Forum Annual Dinner 2,723,465
Sponsorship of Business Day Annual Banking Awards 2,000,000
Annual Bankers Dinner 2,000,000
Sponsorship of Chief Audit Executives Quarterly General Meeting 1,543,500
Sponsorship of International Women's Day Celebration 1,500,000
Endometriosis Campaign 1,500,000
Sponsorship of National Summit on Big Data Economy 1,000,000
Sponsorship of Nigerian Debt Capital Markets Conference 1,000,000
Sponsorship of IWFI Society & Technology Conference & Exhibition 1,000,000
Others 2,636,500
518,985,755

j. Human Resources

Employment of disabled persons

The Group operates a non-discriminatory policy on recruitment. Applications by disabled persons are always fully consid-
ered, bearing in mind the respective aptitudes and abilities of the applicants concerned. In the event of members of staff be-
coming disabled, every effort is made to ensure that their employment with the Bank continues and that appropriate training
is provided. It is the policy of the Bank that the training, career development and promotion of disabled persons should as far
as possible, be identical with those of other employees.

The Group has 1 disabled person in its employment as at 31 December 2017 (31 December 2016: 1)



Analysis of women employed during the year 31 December 2017

Description Number % To Total Staff % To Total New Hire

Female new hire 28 0.9 33.7

Male new hire 55 1.7 66.3

Total new hire 83 2.6 100.0

Total staff 3,280

Female 1,384 42.2

Male 1,896 57.8

3,280 100.0

31 December 2016

Description Number % To Total Staff % To Total New Hire

Female new hire 6 0.2 37.5

Male new hire 10 0.3 62.5

Total new hire 16 0.5 100

Total staff 3,555

Female 1,512 42.5

Male 2,043 57.5

3,555 100

Diamond Bank Annual Report 2017 | 051

Strategic Report

Directors' Report
Continued

Analysis of top management positions by gender as at 31 December 2017 MALE TOTAL
GRADE FEMALE 4 6
General Manager 5 6
Deputy General Manager 2 11 15
Assistant General Manager 1 27
Total 4 20
Percentage 7 74.1 100.0
Analysis of top management positions by gender as at 25.9
GRADE 31 December 2016 MALE TOTAL
FEMALE
10
General Manager 4 6 4
Deputy General Manager 2 2 25
Assistant General Manager 5 20 39
Total 11 28 100
Percentage 28.2 71.8
Analysis of executive and non executive Directors by gender as at 31 December 2017 TOTAL
3
GRADE FEMALE MALE 1
Executive Director 2 1 1
Managing Director 0 1 7
Deputy Managing Director 1 0 1
Non Executive Director 2 5 13
Independent Director 0 1
TOTAL 5 8 100
Percentage
38.5 61.5 TOTAL
4
31 December 2016 1
Analysis of executive and non executive Directors by gender as at 1
FEMALE MALE
GRADE 1 3 5
Executive Director 0 1 2
Managing Director 1 0 13
Deputy Managing Director 100
1 4
Non Executive Director 0 2
Independent Director 3 10
TOTAL 23.08 76.92
Percentage

k. Health, safety and welfare at work

The Bank’s employees are adequately insured against occupational hazards. In addition, medical facilities to specified limits
are provided to employees and their immediate families at the Bank’s expense.

l. Employee involvement and training

The Bank places considerable value on the involvement of its employees and has continued its practice of keeping them
informed on matters affecting them as employees and the various factors affecting the performance of the Bank. This is
achieved through regular meetings between management and staff.

The Bank has in-house facilities for staff training supplemented by facilities of local and foreign educational institutions.

052 | Diamond Bank Annual Report 2017

Strategic Report

Directors' Report
Continued

m. Complaints



NUMBER AMOUNT CLAIMED AMOUNT REFUNDED

In thousands of naira 2017 2016 2017 2016 2017 2016
N’000 N’000 N’000 N’000

Pending Complaints, start of the year 26,833 29,013 5,998,654 8,068,586 --

Received Complaints 433,392 436,375 16,113,273 27,745,566 --

Resolved complaints (444,356) (438,555) (20,245,601) (29,815,498) 12,669,064 3,688,576

Unresolved complaints pending,end of the year 15,869 26,833 1,866,327 5,998,654 --

Automatic Teller Machine (ATM) Complaints

Total Number of Complaints Received   : 143,073

Number Resolved: 134,761

Number Unresolved: 8,312



n. Number of cards issued





Number of Cards

Card Type 2017 2016

Visa Debit Cards 8,505,196 6,497,686

Verve Debit Card 501,870 385,508

Visa Credit Cards 109,273 99,199

Volume Of Transactions 162,773,536 134,136,275

Value Of Transactions 1,098,633,523,372 873,332,785,864



o. Auditors

The Auditors, Messrs. KPMG Professional Services, having satisfied the relevant corporate governance rules on their tenure in
office have indicated their willingness to continue in office as auditors to the Bank. In accordance with Section 357 (2) of the
Companies and Allied Matters Act of Nigeria therefore, the auditors will be re-appointed at the next annual general meeting
of the Company without any resolution being passed.



BY ORDER OF THE BOARD




Uzoma Uja

Company Secretary/Legal Adviser

FRC/2013/NBA/00000001645

PGD’s Place, Plot 4, Block V,Oniru Estate,

Victoria Island Lagos

10 April 2018

Diamond Bank Annual Report 2017 | 053