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
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.
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.
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.
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.
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.
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’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.
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.
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’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.
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.
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.