One of the Nigeria’s top financial institutions, Diamond Banks Plc., has reportedly sacked over 1,000 workers.
Reports say that the latest disengagement by the bank had to do with the fact that the bank is broke and cannot pay its bills.
Although some reports have stated that the tighter CBN monetary policy could also be a factor, sources have hinted that this is not the case.
Some say that the regulatory measures introduced by the Central Bank of Nigeria aimed at protecting the economy, has started affecting the banks’ profitability.
It was learnt that apart from job cuts, the bank is also planning to reduce the number of new branches to be opened this year.
A reliable source confirmed that the banks downturn may not be unconnected with one of it’s former MD who has now gone into politics.
The said MD is said to have allegedly taken a huge sum from the coffers of the bank to use for his gubernatorial campaign in one of the eastern states in Nigeria, which he eventually lost.
The fortunes of Diamond Bank has recently not been on the positive side as its 2015 first-quarter pre-tax profit fell 9.5 per cent to 8.36 billion naira ($42 million) from a year earlier.
The bank did not disclose why profit for the period end-March fell but said in a statement that revenue climbed 5.8 per cent during the period to 40.48 billion naira.
The banks profit after tax also fell by 10.72 per cent to N25.48 billion in 2014, compared with N28.54 billion in 2013 as regulatory induced costs continue to suppress profit.
Its operating expenses also increased by 19.89 per cent to N92.86 billion in 2014 from N77.40 billion in 2013.
Cost-to-income ratio, which measures the ability of a bank in cutting costs while boosting profit, reduced to 72.30 per cent in 2014 as against 66.57 per cent in 2013.
The banks corporate communications unit could not immediately be reached for comment on the development.
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