Battered by OPEX, Diamond Bank’ Post-Tax profit plunges 357%, Full-Year 2017

Diamond Bank Plc released its much awaited financial statements for the year ended 31 December 2017 last Friday. Greeted by a critical mix feelings, many investors had hoped the delay in filling should be of that productive process that would birth an awesome reward to the bank’s shareholders in term of divided payment as there was no prior profit warning.

The Nigeria’s lender, according to the reports made available to the general public recorded a loss before tax of N11.55 billion for the period ended December 31, 2017, which is about 442% decline when compared with the N3.37 billion posted a year earlier.
Likewise, the bank recorded a post-tax loss of N9.01 billion compared to N3.49 billion reported the same period of 2016.

However, gross earnings grew marginally 3.02 percent to N189.62 in the review period of 2017 from N184.04 billion posted the same period of 2016.

Diamond Bank has also released its Q1 2018 financial statements for the year ended 31 March 2018. In the key highlights of the reports are Reported interest income of N38.13 billion for the quarter ended 31st March 2018 as against N38.65 billion recorded in Q1 2017. This represents about 1% decline YoY.

The Bank also reported 81.7% decline in profit after tax from about N4.2billion to about N784million in the corresponding period.
The earnings per share for the period under review stood at 14kobo after declining 26% from the 19 kobo per share reported same period last year.

The higher operating expenses was identified as the major setback and according to the bank, “investments in technology are starting to drive operational efficiencies. Total asset increased by two per cent, which was mostly driven by marginal improvements recorded in customer deposits.”

Commenting on the results, Chief Executive Officer, Uzoma Dozie said: “Diamond Bank made good progress in executing its technology-led retail banking strategy in 2017. We increased our market share and drove scale through a combination of technology and expansion of our services across additional platforms. For instance, we made additional inroads to the unbanked and underbanked populations with the support of our international partners. In addition, the rapid rollout of products and services for entrepreneurs, and small and medium business owners gained significant traction and is a trend that is set to continue.

“The Bank’s net fees and commission were down by 1.3% year-on-year although impairment charges also trended downwards 0.3% year-on-year to N56.8 billion following continued efforts to improve the quality of the loan book, particularly in the Oil and Gas mid-stream sector. Operating costs of the Bank rose by 6.2% due to foreign exchange rate impact following the devaluation of the naira during the year.

“At a macro level, the economic environment improved, albeit marginally. Against this backdrop and Nigeria’s broader positive fundamentals, we disposed of some non-core assets to optimise the use of our resources and focus on the significant potential of our domestic market. By taking this action, Diamond Bank is better positioned to accelerate its growth, productivity and profitability in the short to medium term.”

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