In its H1 2017 financial results released on the floor of the Nigerian Stock Exchange in Lagos, Diamond Bank Plc showcased strong growth in core financial parameters surpassing analysts’ projections for the period.
The interim report and accounts for the Bank’s operations for the first six months of the business year obtained by our correspondent, show significant growth in all key financial parameters as profit before tax surged year-on-year by 2.8 per cent to N10.8 billion.
This followed the leapfrogging of gross income over total expenses during the period under review.
Most significantly and against industry expectations, the Bank’s gross earnings jumped by 16.1 per cent over the previous year to N114.1 billion, while interest income also increased astronomically by 31.5 per cent to N89.1 billion, reflecting the success of the management’s strategic efforts targeted at improving and boosting this income line.
Although the impairment charge increased mildly by 6.9 per cent, which is in tandem with the Bank’s continuation of prudent provisioning, its total asset grew by 0.8 per cent year-on-year to N2.065 trillion, making Diamond Bank one of the top six biggest banks in the country.
Despite the fact that loans to customers shrunk by 1.8 per cent from N1.4 trillion to N1.3 trillion, reflecting the cautious optimism employed by the management to manage and stabilise risk assets as the economy waddles through and out of recession, the Bank’s retail customers grew exponentially with over six million Diamond Y’ello customers opening accounts in the last two years.
Although customer deposit base shrunk by 1.8 per cent from N1.4 trillion to N1.3 trillion within the period, reflecting the effect of the inflationary spiral on savings, deposit from other banks surged by 31.9 per cent to N136.4 billion from N103.4 billion, reflecting strong confidence and trust on Diamond Bank as one of the systemically important banks in the economy.
Commenting on the Bank’s H1 performance, Uzoma Dozie, the Chief Executive Officer, stated that despite the economic headwind, the Bank would remain resilient and sustain the positive growth throughout the two remaining business quarters.
According to Uzoma, the Bank’s strong liquidity and capital adequacy ratios plus its digital infrastructure have strengthened and rightly positioned it to meet customer obligations and offer service deliveries that are beyond banking, adding that the improving macroeconomic conditions will help stimulate and sustain the growth trajectory of the Bank.
He said: “The positive economic signals witnessed at the beginning of the year continued in the second quarter and we believe this will translate to greater productivity in the months ahead. There have been market driven adjustments in the exchange rate of the naira versus other currencies and this has helped supply into these markets. Overdue trade obligations, which were an issue some months ago, have been addressed significantly and demand is generally being satisfied providing the right conditions for trade activities. Inflation has continued to recede, with the prospect of some GDP growth by year end, even if marginal. Against this backdrop, our income streams remain resilient and considerable growth was recorded in gross earnings.”
Speaking further, Uzoma stated that a core strategic focus in the next business quarters is to continue building on the progress made in H1 2017 by accelerating and entrenching the digitalization of products, services and operations, adding that the management will beam its lights on the loan book with a view to improving the quality and further strengthen the balance sheet.
He said: “In the coming months, we plan to sustain the growth momentum by retaining focus on our digital retail strategy and lifestyle banking. A key component of this focus is to continue adding value driving services to our platforms and signing on more merchants to our network.”
Commenting about the result on the floor of the Exchange, analysts and industry watchers opined that the Bank has been rightly positioned for accelerated growth in the next business years ahead, noting that with the strong retail strategy, digital infrastructure and focused management, the core fundamentals have continued to look up.
For example, the Bank’s Low cost deposits account for more than 80 per cent of its deposit base.
This is very significant as it reflects the Bank’s diversified customer base across market segments through compelling retail offerings, giving vent to material risk diversification.
Also, the consistency in the execution of its technology-led retail strategy has continued to drive and deepen customer acquisition and activation, as its mobile banking’s share of total transaction count, jumped to 58 per cent from 46 per cent in the previous year.
The Bank has relentlessly focused its e-payment solutions on convenience, lifestyle, efficiency and mobility, thus, growing revenue from ATMs, cards/POS and online banking.
According to Uzoma, apart from its world-class products and service delivery driven by a strong digital infrastructure, Diamond Bank’s brand is consistently being enhanced by the management’s focus and involvement in multiple partnerships with domestic and international NGOs and similar organizations, including the Gates Foundation, Women’s World Banking, MTN, Bank of Industry and EFinA.
These partnerships have continued to help stimulate the drive for innovation in financial products and quality service delivery in the financial services sub-sector.