Diamond Bank on Friday released its Q3 2016 performance scorecard on the floor of the Nigerian Stock Exchange (NSE), showcasing moderate growth in key financial parameters.
For the nine months under review, the group recorded a growth of 16.9 per cent in total assets, which grew from N1.753 trillion in the same period last year to N2.05 trillion. 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 as at the end of September 2015 to N1.401 billion in the current business year, demonstrating the Bank’s strong ability and network to generate cheap deposits from the retail and middle market segments.
Also, 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, Uzoma Dozie, stated that the Bank’s modest growth in the last nine months despite the inclement operating environment, was the result of management’s 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.
Uzoma said: “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.”
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’ 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.
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.
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.
Speaking further on the performance of the Bank, the CEO said: “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”.
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 ‘B’ rating of the Bank by Fitch Ratings, with Stable Outlook for Short-term and Long-term Foreign Currency Issuer Default Ratings (IDR).
According to Fitch Ratings, the Bank’s National Long-term Rating at ‘BBB+ (nga)’ indicates Diamond Bank’s capacity to meet financial commitments, subject to the country’s business and economic environment.
Reiterating Fitch Ratings, the CEO said that the Bank’s fundamental has remained stable and strong. “Our 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.”
Diamond Bank is one of the eight banks designated as systemically important banks by the Central Bank of Nigeria (CBN) in 2013 and, is rated in 2016 as one of the top three customer-centric banks by KPMG Professional Services, providing reliable and dependable financial services to corporate and individual customers in Nigeria and West Africa. The Bank is a leading retail banking franchise and has remained the leader in the MSME segment.