Diamond’s Atlas Mara woes deepens as chief executive steps down, amidst share placement

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African banking vehicle splits itself into three units ‘to enable faster expansion’

The woes of Bob Diamond’s London-listed African investment vehicle Atlas Mara have deepened after it announced the immediate departure of its chief executive and raised extra funds from an overnight placing.

The company said it would appoint a replacement “in due course” for John Vitalo, who worked for Mr Diamond when he ran Barclays and followed the American investment banker after he left the British bank to help set up his new African banking venture. Mr Vitalo, who became the first chief executive of Atlas Mara after its creation in 2013, stepped down on Wednesday.

The company’s board is understood to have decided that he was not moving fast enough to cut costs and was not delivering the performance expected. Mr Vitalo did not respond to requests for comment. His departure is the latest blow for the company, which slid into a loss in the third quarter of last year and recently announced the departure of Arnold Ekpe, the veteran African banker, as its chairman.

Atlas Mara said it had raised $13.5m from a placement of more than 7m shares at $1.9125 a share to a number of existing shareholders in the company, including Mr Diamond, who has been interim chairman since Mr Ekpe left.

The company also announced a reorganisation, splitting itself into three units: commercial and retail banking, fintech, and markets and treasury.

It said the change would “enable faster expansion and responsiveness in the market environment”. The bank said it planned to cut $20m of operating and staff costs in its central functions, which are mostly based in Dubai and Johannesburg.

This is on top of its earlier $8m cost-cutting target. The bank’s overall operating costs, which reached $185m in 2015, are considered high as a proportion of its revenues. For every dollar it earns, more than 85 cents are spent on operating costs.

Aiming to create the first pan-African banking group based on new technologies, Atlas Mara has acquired interests in seven sub-Saharan countries, including Nigeria, Botswana, Zimbabwe, Mozambique, Rwanda, Tanzania and Zambia. Its shares, which have steadily fallen from more than $12, were up slightly at $2.12 on Thursday afternoon.

There has been growing speculation about a potential bid to take the company private, but insiders have rejected this idea. Many of the company’s biggest investors in its initial public offering are sitting on losses of more than 80 per cent, including Janus Capital, Wellington Management and Guggenheim.

Copyright The Financial Times Limited 2017. All rights reserved.

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