Diamond Bank Posts 78% Drop in Profit After Tax

Diamond Bank Posts 78% Drop in Profit After Tax

Diamond Bank Posts 78% Drop in Profit After Tax

Diamond Bank Plc last Friday reported a profit after tax of N3.511 billion for the nine months ended September 30, 2016, showing a decline of 78 per cent from N15.967 billion in the corresponding of 2015. The decline in bottom-line resulted from high impairment charges that soared by 106 per cent to N40.261 billion, from N19.5 billion in 2015.

The bank said it opted for prudent provisioning by cleansing its books of assets with poor quality, thus paving the way for operational efficiency and improved earnings for the business years ahead.

However, the bank recorded a growth of 16.9 per cent in total assets to N2.05 trillion, from N1.753 trillion in 2015. This was driven mainly by the value of the local currency and growth in customer deposits, which surged 13.6 per cent from N1.233 billion, demonstrating the bank’s strong ability and network to generate cheap deposits from the retail and middle market segments.

Similarly, the bank grew its loan portfolio from N763.634 billion to N1.041 trillion, representing 36.4 per cent increase.

Commenting on the results, Chief Executive Officer of Diamond Bank, Mr. Uzoma Dozie, said the stable performance despite the inclement operating environment, stemmed from management’s focus on key strategic projections across the three core segments of retail, business and corporate banking.

He noted that bank will continue to passionately pursue its technology-driven retail strategy to optimise cost and reap predictable bountiful results in the medium to long term.

“We believe the macro conditions and other external factors will remain challenging for the rest of the year and well into 2017. However, by pursuing our technology-led retail strategy and with our focus on innovation and scalability, we believe the Bank is well-placed to benefit in the medium to long term from the favourable fundamentals in Nigeria, namely a large population, many of which remain unbanked. This strategy stands to benefit all stakeholders, including our shareholders and customers in the long run,” he said.

Dozie explained that the economic environment has also impacted business and industry as a whole, particularly those in the oil and gas sector.

“For Diamond Bank, this has translated to elevated impairment charges for the third quarter, as we push for a healthier loan book and to comply with regulations,” he said.

Despite the fall in profit, the bank maintained very stable and modest growth in its capital adequacy and liquidity ratios, with 15.6 per cent and 39.4 per cent, which is above the regulatory requirements of 15 per cent and 30 per cent respectively.

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