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12 Things You Didn’t Know About African Banking Magnate Bob Diamond

12 Things You Didn’t Know About African Banking Magnate Bob Diamond

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Bob Diamond has made a name for himself in the banking world, moving from a controversial run with Barclays to founding his own banking powerhouse. The co-founder of Atlas Mara, he is making moves across the African continent to build his company’s assets there. Here are 12 things you didn’t know about Bob Diamond and his increasing presence in Africa.

Sources: CNBC.com, Telegraph.co.uk, WSJ.com, CNBCAfrica.com, Bloomberg.com, TheGuardian.com, AtlasMerchantCapital.com

His time in academia preceded an extremely successful career in business
His time in academia preceded an extremely successful career in business Telegraph.co.uk

He began a career in academia before moving into finance

Born in Concord, Massachusetts, Diamond earned an MBA from the University of Connecticut Business School, and took a job lecturing there. In 1979, he took an investment banking job with financial services firm Morgan Stanley at the advice of a friend who had just begun working there. By 1992, Diamond was running the Asian operation for Credit Suisse bank.

The LIBOR scandal prompted protests at Barclays branches in London, England TheSundayTimes.co.uk
The LIBOR scandal prompted protests at Barclays branches in London, England
TheSundayTimes.co.uk

Diamond worked at Barclays until the LIBOR scandal

Diamond joined Barclays in 1996, eventually working his way up to group chief executive in January 2011. In July 2012, he resigned after company employees were involved in manipulating the London interbank offered rate, later known as the LIBOR scandal. LIBOR is a benchmark rate that some of the world’s leading banks charge each other for short-term loans.

Diamond has been the target of much controversy over his enormous salary while working for Barclays IBTimes.com
Diamond has been the target of much controversy over his enormous salary while working for Barclays
IBTimes.com

Diamond’s salary caused controversy

During his time at Barclays, Diamond was called “the unacceptable face” of banking by then-business secretary Peter Mandelson, specifically for his shocking salary of over 63 million pounds. In early 2011, Barclays announced Diamond would be receiving an additional bonus of 6.5 million pounds, the largest of any CEO of a British bank, which caused more controversy.

Bob Diamond's Atlas Mara has been very successful since he founded it in 2013 AFKInsider.com
Bob Diamond’s Atlas Mara has been very successful since he founded it in 2013
AFKInsider.com

He founded Atlas Mara in 2013 with an African focus

On Nov. 28, 2013, Diamond, along with entrepreneur Ashish Thakkar, founded Atlas Mara. The company aims to establish a sub-Saharan Africa-wide banking chain by purchasing and uniting existing African banks.

Atlas Merchant Capital was formed to invest in the financial sector in both domestic and international markets Telegraph.co.uk
Atlas Merchant Capital was formed to invest in the financial sector in both domestic and international markets
Telegraph.co.uk

Diamond also co-founded Atlas Merchant Capital to invest in the financial services sector

Also in 2013, Diamond established Atlas Merchant Capital along with David Schamis to invest in financial services. The New York-based Atlas Merchant Capital maintains an international presence in more developed markets throughout the U.S., Canada, Western Europe, and Japan.

Barclays bank in Nairobi is now up for sale BBC.co.uk
Barclays bank in Nairobi is now up for sale
BBC.co.uk

Diamond saw opportunities when Europeans pulled back from African investment following the global financial crisis

At the London Business School’s Africa Business Summit, Diamond said, “There are headwinds from commodities and international banks pulling out…Since the financial crisis we have seen many of the Europeans pull back (from Africa), particularly those who were providing trade finance.” Diamond saw opportunities opening up.

Source: CNBC.com

Diamond had to justify Atlas Mara's massive losses to shareholders this quarter UK.BusinessInsider.com
Diamond had to justify Atlas Mara’s massive losses to shareholders this quarter
UK.BusinessInsider.com

Atlas Mara made a loss in the first quarter of 2016

Diamond’s Atlas Mara recorded a $6.7 million USD loss in the first quarter of 2016, down from a $0.5 million profit in the same period of 2015. However, excluding the $6 million merger and acquisition charges the company experienced in its purchase of the Finance Bank of Zambia PLC and others, the losses totaled just $2 million.

The South African rand is one of many African currencies that is falling in relation to the international market TheConversation.com
The South African rand is one of many African currencies that is falling in relation to the international market
TheConversation.com

Atlas Mara’s losses are in part due to falling African currencies

Many of the African currencies that Atlas Mara generates revenue in, including Nigeria and Zambia, fell against the dollar in the first quarter of 2016, accounting for approximately $1.1 million in losses. The company also blamed credit provisions taken in Zimbabwe against some of its corporate loans.

Diamond is confident his company will get back on track and end 2016 with a profitable bottom line FinancialMail.co.za
Diamond is confident his company will get back on track and end 2016 with a profitable bottom line
FinancialMail.co.za

Diamond’s company expects to end with an annual profit greater than 2015

Due to its aggressive growth strategy, Atlas Mara expects to outweigh its early reported losses with earnings from new acquisitions. Profits for 2016 will beat earnings in 2015, totaling $11.3 million. Chief executive John Vitalo said, “…We expect the year to be one of uneven quarterly performance with improving profitability over the course of the year as we execute on our focused initiatives.”
Source: Telegraph.co.uk

Diamond is on the move to try to acquire Barclays Africa CityAM.com
Diamond is on the move to try to acquire Barclays Africa
CityAM.com

He is trying to acquire Barclays Africa

Diamond’s Atlas Merchant Capital is currently working with the U.S. private equity firm, the Carlyle Group, to establish a consortium to bid for stakes in Barclays Africa. Diamond has refused to comment about the potential merger, but Barclays has started selling down its majority stake in its Africa component since the beginning of May 2016 and Diamond, along with several other potential bidders, are keen for the shares.

Kenya, for instance, is putting resources into developing its horticulture sector UN.org
Kenya, for instance, is putting resources into developing its horticulture sector
UN.org

Diamond points to economic diversification in Africa as a sign that investment opportunities are ripe

Speaking about economic diversification in Africa, specifically in Mozambique and Nigeria as they move away from a narrow focus on extractive industries, Diamond remains positive about investment opportunities on the continent despite the current economic slump. He also points to the fact that the price of business is lower, as the currency levels versus the dollar and other major currencies are at good investment levels.

Diamond's shareholders have been frustrated with his dealmaking in the past MarketingWeek.com
Diamond’s shareholders have been frustrated with his dealmaking in the past
MarketingWeek.com

Diamond has been criticized for overpaying for deals in the past

Considering Atlas Mara’s poor performance in the first quarter of 2016, Diamond is having some difficulty convincing investors to get on board with his strategy of acquiring Barclays Africa. In the past, some have criticized Atlas Mara for overpaying for deals, and the company’s shares are trading at less than half their initial public offering value when it launched in 2013.