Former Barclays CEO targets N200million to boost investment in Union Bank

Union Bank

Former Chief Executive Officer of British Bank, Barclays Plc, Bob Diamond, has begun raising £200 million to boost his new firm’s investment in Union Bank of Nigeria.

The firm, Atlas Mara, which owns lenders in seven countries across Africa, will use the cash to boost its holding in Union Bank to 44.5 per cent from about 31, it was revealed on Wednesday.

It comes as the Serious Fraud Office in Britain charged Barclays and four of its former executives for fraud over the way the bank raised billions of pounds from Qatari investors enabling it to avoid a government bailout.

The financier – who quit as the bank’s chief executive over the Libor rate-rigging scandal in 2012 – has been battling to conquer Africa through his investment vehicle Atlas Mara.

On Tuesday, Diamond’s predecessor at Barclays, along with three other former bosses, were charged with fraud over a £7 billion cash call at the height of the financial crisis.

At the time, Diamond was head of Barclays’ US division.

Atlas Mara is now raising extra cash by selling a 35 per cent stake and issuing a bond to Canadian investment company Fairfax Africa Holdings.

Existing shareholders will also be asked to put their hands in their pockets.

Atlas Mara has plunged in value since its December 2013 IPO after growth across Africa slumped and currencies weakened amid a commodities rout. Diamond, 65, in February ousted Chief Executive Officer John Vitalo and pledged to cut annual operating costs by $20 million after rising expenses threatened the company’s ability to expand through acquisitions.

Union Bank, Atlas Mara’s single biggest investment in Africa, is Nigeria’s worst-performing bank stock this year. It announced plans to raise capital through a rights issue in November as the country’s small and mid-sized lenders struggled to cope with a contraction in the economy of Africa’s biggest oil producer.

Atlas Mara agreed to acquire an indirect 13.4 percent shareholding in Union Bank from the Clermont Group for $55 million, it said. Union Bank is going through regulatory approvals and will then start the share sale, spokeswoman Ogochukwu Ekezie said.