How intrigues lapses losses caused diamond banks fall

Diamond Bank, a Nigerian bank, faced several challenges that led to its decline and eventual acquisition by Access Bank in 2019. Here are some of the key factors that contributed to its downfall:

  1. Intricate web of non-performing loans: Diamond Bank had a significant amount of non-performing loans (NPLs) on its books, which affected its ability to generate profits and maintain a healthy balance sheet.
  2. Lack of diversification: The bank's loan book was heavily concentrated in a few sectors, such as oil and gas, which made it vulnerable to sector-specific risks.
  3. Inadequate risk management: Diamond Bank's risk management practices were criticized for being inadequate, which led to a buildup of bad debts and a decline in the bank's credit quality.
  4. Competition from new entrants: The Nigerian banking industry has become increasingly competitive, with new entrants such as fintech companies and mobile payment platforms disrupting traditional banking services.
  5. Regulatory challenges: Diamond Bank faced regulatory challenges, including a Central Bank of Nigeria (CBN) directive to recapitalize the bank, which added to its financial burdens.
  6. Lack of investment in technology: The bank's technology infrastructure was outdated, which made it difficult to compete with more modern and digitally savvy banks.
  7. Poor corporate governance: Diamond Bank faced allegations of poor corporate governance, including issues related to board composition, executive compensation, and conflicts of interest.
  8. Dependence on a few large customers: The bank's revenue was heavily dependent on a few large customers, which made it vulnerable to customer churn and revenue decline.
  9. Inadequate capitalization: Diamond Bank's capital adequacy ratio (CAR) was below the regulatory minimum, which made it difficult for the bank to raise capital and support its growth ambitions.
  10. Lack of strategic direction: The bank's leadership and strategy were criticized for being unclear and ineffective, which led to a lack of direction and focus.

These factors combined to create a perfect storm that ultimately led to Diamond Bank's decline and its acquisition by Access Bank in 2019.