{"id":9345,"date":"2016-11-01T16:31:20","date_gmt":"2016-11-01T15:31:20","guid":{"rendered":"http:\/\/nationalwire.com.ng\/?p=9345"},"modified":"2016-11-01T16:31:20","modified_gmt":"2016-11-01T15:31:20","slug":"q3-diamond-bank-sustain-low-earnings-performance-as-profit-dips-by-n12bn","status":"publish","type":"post","link":"https:\/\/nationalwire.com.ng\/sub\/q3-diamond-bank-sustain-low-earnings-performance-as-profit-dips-by-n12bn\/","title":{"rendered":"Q3: Diamond Bank Sustain low Earnings Performance \u2026As Profit dips by N12bn"},"content":{"rendered":"
\"Uzoma<\/a>
Uzoma Dozie, MD, Diamond Bank<\/figcaption><\/figure>\n

Q3: Diamond Bank Sustain low earnings performance <\/strong><\/p>\n

\u2026As Profit dips by N12bn<\/strong><\/p>\n

Diamond Bank Plc, one of the tier two bank has sustained its low earnings performance as shown in its unaudited third quarter financial for the period ended September 30, 2016.<\/p>\n

Key highlight of the accounts shows that profit for the period went down by 78 percent from N15,967 billion in 2015 to N3,511 billion at the end of September 30, 2016.<\/p>\n

Profit before tax also dropped sharply by 79.1 percent to N3.892 billion, which is far below N18.595 billion that was recorded same period in 2015. Gross earning was down marginally by 3 percent to N151.109 billion in the period under consideration, as against N156.543 billion that was posted in 2015. Earnings per shares dropped by 77.9 percent to 15 kobo against 68 kobo that was reported in 2015.<\/p>\n

However, the management of Diamond Bank was able to reduce their operating expenses by 3 percent from N74.377 million in 2015 to N71.886 million for the nine months of 2016.\u00a0 According to market analyst, the main reason for this poor set of results appears to be asset quality deterioration.<\/p>\n

Loan loss provisions grew by 230 percent year on year and by over 100 percent quarter on quarter to N21 billion. This single result overshadowed a 17 percent year on year growth in profit before provisions of N40 billion. Of the two revenue lines, net interest income grew 7 percent \u00a0to N28 billion while non-interest income grew much faster, by 51 percent year on year to N11 billion.<\/p>\n

In addition, analyst focus and concern are more on the level of the bank provisioning, because Diamond Bank had guided to a cost of risk estimate of around 5 percent for the year. It is likely to breach that figure now since the nine month figure equates to a what a full year 5 percent cost of risk figure will imply, unless the bank is able to find recoveries in the fourth quarter.<\/p>\n

However, commenting on the results, Chief Executive Officer, Uzoma Dozie, stated that the Bank\u2019s modest growth in the last nine months despite the inclement operating environment, was the result of management\u2019s focus on key strategic projections across the three core segments of retail, business and corporate banking, noting that the 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.<\/p>\n

Uzoma said: \u201cWe 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.\u201d<\/p>

\r\n
Advertisement<\/div>\r\n\t\t\t\t\t\t\t<\/a>\r\n \r\n\t\t\t\t\t\t\t<\/div>\n

Monetarists and analysts had, amidst the regulatory headwinds that characterized the industry in the last nine months, and the catalogue of macroeconomic challenges rocking the economy, predicted greyed results in the industry. But despite analysts\u2019 predictions, Diamond Bank recorded strong growth in non-interest income, which leapfrogged by 38.1 per cent to N37.6 billion. The Bank grew its retail customer base to over 13 million, while the use of its mobile app by customers continues to grow as transaction count increased from 4.3 million to 7.9 million with volume surging from N4.3 billion to N8.5 billion year on year.<\/p>\n

Also, the restructuring of the bank which started in Q1 2016 continues to yield results in terms of strategic focus, quality service delivery and cost containment. For example, the result show that through prudent allocation of resources, operating costs and interest expense shrank by 2.5 per cent and 22.8 per cent respectively.<\/p>\n

Although total comprehensive income declined by 26.3 per cent year on year to N13.2 billion, with profit before tax shrinking to N3.5 billion on the back of impairment charges as the bank 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.<\/p>\n

Speaking further on the performance of the Bank, the CEO said: \u201cThe 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\u201d.<\/p>\n

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 towers above the regulatory requirements of 15 per cent and 30 per cent respectively. These was reaffirmed in the current \u2018B\u2019 rating of the Bank by Fitch Ratings, with Stable Outlook for Short-term and Long-term Foreign Currency Issuer Default Ratings (IDR).<\/p>\n

According to Fitch Ratings, the Bank\u2019s National Long-term Rating at \u2018BBB+ (nga)\u2019 indicates Diamond Bank\u2019s capacity to meet financial commitments, subject to the country\u2019s business and economic environment.<\/p>\n

Reiterating Fitch Ratings, the CEO said that the Bank\u2019s fundamental has remained stable and strong. \u201cOur regulatory capital remains strong. Liquidity of the bank also remains high and is well above the guidance ratio stipulated by CBN. As we predicted, 2016 is proving to be particularly challenging for the banking industry owing to an interplay of economic headwinds, industry developments and stricter regulation. Nevertheless, we have remained focused on our technology-led retail strategy, building our core business, and developing the platforms and relationships to achieve and manage scale in the future.\u201d<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Q3: Diamond Bank Sustain low earnings performance \u2026As Profit dips by N12bn Diamond Bank Plc, one of the tier two bank has sustained its low earnings performance as shown in its unaudited third quarter financial for the period ended September 30, 2016. Key highlight of the accounts shows that profit for the period went down …<\/p>\n","protected":false},"author":11,"featured_media":9346,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[23,17,624],"tags":[36,818,740,575],"coauthors":[2392,2393],"class_list":["post-9345","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-business","category-news","category-politics","tag-cbn","tag-ndic","tag-nse","tag-sec"],"yoast_head":"\nQ3: Diamond Bank Sustain low Earnings Performance \u2026As Profit dips by N12bn - National Wire<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nationalwire.com.ng\/sub\/q3-diamond-bank-sustain-low-earnings-performance-as-profit-dips-by-n12bn\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Q3: Diamond Bank Sustain low Earnings Performance \u2026As Profit dips by N12bn - National Wire\" \/>\n<meta property=\"og:description\" content=\"Q3: Diamond Bank Sustain low earnings performance \u2026As Profit dips by N12bn Diamond Bank Plc, one of the tier two bank has sustained its low earnings performance as shown in its unaudited third quarter financial for the period ended September 30, 2016. 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