Diamond Bank records 26% drop in Profit

Diamond Bank

Diamond Bank Plc has reported a profit after tax decline of 25.5 per cent from N12.2 billion in half year of 2015 to N9.05 billion half year of 2016.

The bank also announced 26 per cent drop in profit before tax to N10.5 billion in H1 2016 from N14.2 billion recorded in H1 2015.

Commenting on the Bank’s half year performance, Chief Executive Officer, Diamond Bank Plc, Uzoma Dozie, stated that despite the economic headwind, the Bank would remain resilient and sustain the positive growth throughout second half of 2016.

According to him, the Bank’s strong liquidity and capital adequacy ratios plus its digital transformation have rightly positioned it to meet customer obligations and offer service deliveries that are beyond banking.

He said: “With the domestic economy contracting, the Nigerian banking industry has faced a number of challenges over the last six months. Nevertheless, in the first half of 2016, we have remained resilient in weathering these headwinds and there are real bright spots in our income streams, as well as noteworthy cost reduction, which gives us confidence going into the second half of the year.

“Due to actions taken and an ongoing prudent approach, our regulatory capital remains strong. This position of strength helped offset the one-off impact of the recent devaluation of the naira, as acknowledged by Fitch Ratings when they affirmed our B rating with a stable outlook. Liquidity of the bank also remains high and is well above the guidance ratio stipulated by CBN.

“Although year on year impairment charge grew by 45.6 per cent to N19.0 billion, reflecting the Bank’s continuation of prudent provisioning, which is aimed at strengthening performance in the years ahead; its operating costs and interest expense are shrunk by 10.7 per cent and 27.5 per cent respectively compared to H1 2015, reflecting success of the cost control initiative and low cost deposit strategy.”

Speaking further, he stated that despite the catalogue of challenges facing the sub-sector, which were exacerbated by the recent devaluation of the naira and foreign exchange scarcity, culminating in backlog of unpaid salaries and wages for individuals, Diamond Bank has continued a diligent implementation of its focus on curtailing cost.

According to him, this has resulted in 10.7per cent reduction in operating expenses and 3.8per cent drop in employee benefit expenses for the period under review.

The Bank also integrated further its retail offering and the supporting infrastructure with the opportunities created by its value chain marketing approach in the corporate and business banking segments.

“In the last few months, evidence has shown that the new strategy and initiatives to curtail costs are proving successful and are reflected in the bank’s financial indicators. This is reassuring. Year on year, costs came in lower and as we conclude the organizational restructure, we expect to harvest more savings from operational and employee expenses. The primary benefits of this however are the resources that we have freed up to provide improved services to customers. Having done this, we are optimistic that the Bank is in the right markets and has the wherewithal to excel and create value for shareholders in the long run,” stated Dozie.

Meanwhile, the Bank sustained a strong top line growth with the asset base surging to N1.970 trillion from N1.753 trillion in the same period last year, representing 12.4 per cent increase.

Credit creation improved by 28.6 per cent as loans and advances to customers grew from N763.6 billion in the same period last business year to N982.3 billion while its retail customers grew to over 13 million with 7 million of these opening accounts in the last 2 years.


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