Why Indian Billionaire, Gupta Is Buying Pascal Dozie’s Diamond Bank UK

MICHAEL AKINOLA

Nigeria’s Diamond Bank is selling its United Kingdom subsidiary to Sanjeev Gupta, billionaire NRI metals tycoon and owner of Wyelands Bank. 

Central Bank of Nigeria has approved the transaction, so it is now up to the UK regulators to give it the green light.

Gupta, who leads the London-headquartered $12 billion GFG Alliance group of companies, has entered into an agreement with Diamond Bank, one of the fastest growing retail banks in Nigeria, to acquire its UK-regulated banking subsidiary, Diamond Bank (UK), which he intends to reshape as a post-Brexit bank to support the UK’s trade with Commonwealth markets.

The 47-year-old’s acquisition is part of his latest strategy to expand the financial services activities of the GFG Alliance, alongside its other businesses of metals, industrials, power generation, infrastructure and property.

Diamond Bank was founded over 20 years ago by Dr. Pascal G. Dozie.

Diamond Bank UK recorded a pre-tax profit of £1.75m on revenue of £8.3m in 2016, its most recently filed accounts show. It had total equity of £34.4m at the end of that year. The transaction will be around that value and funded by equity from the Gupta family, according to a person familiar with the matter.

Originally a commodities trader, Gupta has over the past few years embarked on a trail of acquisitions of distressed industrial assets in Britain, Australia and the United States over the past few years to build a privately owned industrial conglomerate, spanning from metals and mining to power and property.

He has become one of Britain’s biggest industrialists, with assets including the country’s last aluminium smelter in the Scottish Highlands and a number of former Tata Steel mills.

He acquired Wyelands Bank, another commercial lender, in 2016.

“Our first bank, Wyelands Bank, saw a gap in effective financial servicing for mid-sized UK industrial companies targeting developed countries. BCTB will enable us to (help) UK businesses access fast-growing markets, especially within the Commonwealth,” Gupta said.

“Post-Brexit there will be a heightened need to provide competitive financing to British companies in the commodities and industrial sectors as they seek to grow in new markets globally. BCTB will aim to be the ‘bridge’.”

Gupta told Reuters in February that his company has no plans to slow its rapid pace of acquisitions this year and could look to raise capital through debt or equity markets.

He plans to spend $1 billion in the next three years to expand his businesses in India, where Liberty House is the preferred bidder for auto component manufacturer Amite Auto India.

Born in Punjab, India, Gupta moved to Britain aged 12 and ventured into business at Cambridge University by selling chemical products to Nigeria, where his industrialist father had business interests.

He rose to prominence in 2016 when he offered to rescue Tata Steel’s UK assets at the height of a steel market crisis that led to job losses, capacity cuts and bankruptcies worldwide.