Diamond Bank Posts Half-year Profit Drop

Diamond Bank Plc on Thursday released its half year 2016 unaudited financial results. It revealed that its profit after tax dropped to N9.1billion at the end of June 2016, from N12.155 billion in the corresponding period of 2015. The results also showed that its profit before tax during the period under review also plunged to N10.5billion, as against the N14.193billion recorded in the comparable period of 2015.

However, the interim report and accounts of the bank for the first six months of the year also showed that its total comprehensive income rose by 13.3 per cent year-on-year

to N16.3billion as against N14.4billion recorded in comparable period of 2015. Non-interest income also surged by 33.4 per cent to N26.5billion, reflecting the successful efforts targeted at improving this income line and also the focused strategy of management, which were sharpened at improving digital functionality and widening financial inclusion.

The bank improved on its credit creation by 28.6 per cent as loans and advances to customers grew from N763.6billion in the comparable period of last year to N982.3billion. Also, loans to other banks jumped by 30.7 per cent to N78.5billion in first half of 2016, from N60.1billion in the corresponding period last year, while its retail customers grew to over 13 million with seven million of these opening accounts in the last two years.
Commenting on the results, its Chief Executive Officer, Mr. Uzoma Dozie, stated that despite the headwinds in the economy, the bank remained resilient and assured that it would sustain the positive growth throughout the second half of the year.

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.”

Speaking further, Dozie 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.

“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 organisational 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.