28 Jul 2016 15:51
Diamond Bank Plc
Unaudited Results for the Half Year ended 30th June 2016
http://www.rns-pdf.londonstockexchange.com/rns/5675F_-2016-7-28.pdf
DIAMOND BANK PLC REPORTS HALF YEAR PROFIT BEFORE TAX OF N10.5 BILLION
Half Year highlights
Financial
· Profit before tax of N10.5 billion from operations in first half of 2016.
· Non-interest income increased by 33.4% to N26.5 billion, reflecting successful efforts targeted at improving this income line.
· Impairment charge of N19.0 billion, representing a year-on-year increase of 45.6%, and a continuation of the bank's prudent approach to provisioning.
· Operating costs and interest expense are down by 10.7% and 27.5% respectively compared to H1 2015, reflecting success of the cost control initiative and low cost deposit strategy.
· Total comprehensive income rose by 13.3% year on year to N16.3 billion.
Strategic
· Fitch Ratings affirms Diamond Bank's B rating with stable outlook.
· Despite economic headwinds, Diamond Bank's strategy is delivering a platform for growth with prospects for improved earnings and lower operating costs for the rest of 2016.
· Organizational restructuring that commenced in Q1 2016 begins to deliver results in terms of specialization, service delivery and cost containment.
· Continued focus on digital and IT infrastructure providing scale and efficiencies.
· Over 12 million retail customers on our books with 7 million of these opening accounts in the last 2 years.
· Diamond Mobile Apps usage continues to accelerate as transaction count increased from 1.6 million to 5.1 million while volume increased from N1.26 billion to N5.5 billion year on year.
Commenting on the results, the Chief Executive Officer, Mr. Uzoma Dozie 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. Liquidity of the bank also remains high and is well above the guidance ratio stipulated by CBN.
We believe the macro conditions and other external factors will remain challenging. Moreover, naira devaluation, rising inflation and an interplay of other macro-economic conditions may lead to elevated levels of impairment charges in 2016. However, our very conservative approach to managing our loan book protects its quality in the long run."
Strategic overview
In first half of 2016 Diamond Bank continued to progress with the roll out of its technology-led retail strategy, which included reconfiguring its operating model. In Q1, the focus was on the market facing business units and this has since shifted to the support functions within the organization. Digital platforms have also helped cost reduction.
The last six months were marked by dynamic changes in the wider economy that continue to have an impact on the banking sector. These range from devaluation of the naira, foreign exchange scarcity, difficult operating environment for companies, and backlog of unpaid salaries and wages for employees. To address these challenges, Diamond Bank has continued its focus on cost reduction, resulting in a 10.7% fall in operating expenses, and a 3.8% drop in employee benefit expenses in the first half of the year. The Bank has also improved cross selling across the retail, business and corporate segments.
As a result, Diamond Bank is better positioned for second half of 2016 and thereafter.
Mr. Dozie also said:
"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 organizational 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."
Group Statement of Comprehensive Income
30 Jun. 2016 N'000 | 30 Jun. 2015 N'000 | YoY Change | |
Interest and similar income | 67,763,120 | 83,164,777 | (18.50%) |
Interest expense | (17,795,872) | (24,543,688) | 27.50% |
Net interest income | 49,967,248 | 58,621,089 | (14.80%) |
Net fee and comm. and other income | 26,473,257 | 19,844,324 | 33.40% |
Impairment Charge | (18,998,498) | (13,047,918) | (45.60%) |
Net operating income | 57,442,006 | 65,417,495 | (12.20%) |
Employee benefit expenses | (16,891,918) | (17,561,851) | 3.80% |
Operating expenses | (30,064,262) | (33,662,256) | 10.70% |
Profit/(loss) before tax | 10,485,826 | 14,193,388 | (26.10%) |
Income tax | (1,432,039) | (2,038,600) | 29.80% |
Profit/(loss) after Tax | 9,053,787 | 12,154,788 | (25.50%) |
Other comprehensive income (net) | 7,272,308 | 2,251,952 | 223.0% |
Total comprehensive income | 16,326,095 | 14,406,740 | 13.30% |
Group Statement of Financial Position
30 Jun. 2016 N'000 | 31 Dec. 2015 N'000 | YoY Change | |
Cash and bal. with central banks | 300,640,750 | 361,166,936 | (16.8%) |
Financial assets held for trading | 5,290,364 | 13,116,843 | (59.7%) |
Derivative assets | - | 161,622 | (100.0%) |
Assets pledged as collateral | 158,497,647 | 172,100,785 | (7.9%) |
Loans to banks | 78,543,733 | 60,103,340 | 30.7% |
Loans and advances to customers | 982,344,146 | 763,634,827 | 28.6% |
Investment securities | 292,337,669 | 267,337,206 | 9.3% |
Assets held for sale | 4,613,554 | 4,409,085 | 4.6% |
Fixed and intangible assets | 69,331,161 | 67,518,381 | 2.7% |
Deferred tax | 4,984,388 | 4,984,544 | 0.0% |
Other assets | 74,060,652 | 38,698,711 | 91.4% |
Total assets | 1,970,644,064 | 1,753,232,280 | 12.4% |
Deposits from Banks | 142,201,502 | 115,819,590 | 22.8% |
Deposits from Customers | 1,333,497,429 | 1,233,591,063 | 8.1% |
Current income tax liability | 1,698,836 | 1,697,816 | (0.1%) |
Other liabilities | 74,299,674 | 46,217,258 | (60.8%) |
Borrowings | 132,017,576 | 102,719,571 | (28.5%) |
Long term debt | 55,862,687 | 38,577,527 | (44.8%) |
Equity | 231,066,360 | 214,609,455 | 7.7% |
Total equity and liabilities | 1,970,644,064 | 1,753,232,280 | 12.4% |
Key Ratios & Per Share Data
• Capital Adequacy Ratio of 15.6% (16.3% Dec 2015)
• Loan to deposit ratio at 78.9% (66.5% Dec 2015)
• Liquidity ratio (Bank) 39.8% (53.8% Dec 2015)
• Cost of risk 4.1% (6.7% Dec 2015)
• Coverage Ratio of 61.9% (100.4% Dec 2015)
• Net Interest Margin of 5.6% (6.1% Dec 2015)
• Cost to income ratio of 61.4% (61.0% Dec 2015)
• NPL ratio of 8.9% (6.9 % Dec 2015)
• ROAE of 8.1% (2.7% Dec 2015)
• EPS of 39(k) (24k Dec. 2015)
The investors' conference call will hold on Wednesday August 3, by 2.00pm. Call details are highlighted below.
Conference Call for Results
Diamond Bank Plc (Bloomberg: DIAMONDB NL / Reuters DIAMONB.LG) will be hosting a teleconference call for analysts and investors on Wednesday August 3rd 2016 at 2pm Lagos (2pm London / 9am New York / 3pm Johannesburg & Cape Town) with its senior management to discuss Diamond Bank Plc's financial results for the half year ended June 30th 2016. There will be an opportunity at the end of the call for management to take questions from investors and analysts.
The teleconference call facility can be accessed by dialing:
UK Toll Number: 02031394830
UK Toll-Free: 08082370030
Nigeria Toll Number: 012775820
South Africa Toll Number: 0216724008
USA Toll Number: 17188739077
And then entering the following access code:
98184926#
Participants should register for the call at least five minutes before the start of the presentation.
A pdf copy of the presentation will be posted to Diamond Bank's website on the morning of Wednesday, August 3rd 2016 at www.diamondbank.com.
For the detailed Profit and Loss account, Balance Sheet, Cashflow statement and notes to accounts, please visit our website - http://www.diamondbank.com
About Diamond Bank Plc
Diamond Bank Plc began as a private limited liability company on March 21, 1991 (the company was incorporated on December 20, 1990). Ten years later, in February 2001, it became a universal bank. In January 2005, following a highly successful Private Placement share offer which substantially raised the Bank's equity base, Diamond Bank became a public limited company. In May 2005, the Bank was listed on The Nigerian Stock Exchange.
Today, Diamond Bank is the fastest growing retail bank in Nigeria with a track record of high quality banking solutions for customers. It's the lead driver of financial inclusion and enhanced customer experience through innovation and technology. Regarded as supporter of lifestyle trends, it mobile banking app, "Diamond Mobile" currently has over 1 million active subscribers on its platform. Diamond Bank has over the years leveraged on its underlying resilience to grow its asset base and to successfully retain its key business relationships.
It has also played a leading role in partnering with domestic and International bodies such as Women's World Banking, Bill and Melinda Gates Foundation, MTN etc. to create easy access to financial services for the unbanked.
We have retained excellent banking relationships with a number of well-known international banks, allowing us to provide a range of world class banking services to suit the business needs of our clients. These international banking partners include Diamond bank UK, Bank of Beirut; BanqueLibano-Francaise, BHF Bank, BNP Fortis, BNP Paribas, Byblos Bank, Citibank, Commerzbank, Credit Suisse, Deutsche Bank, FBN (UK) Limited, HSBC Bank, ING Bank, KBC Bank, Mashreq Bank, Nordea Bank, SMBC Ltd, Standard Bank, Standard Chartered, SvenskaHandelsbanken, UBS Zurich.
Investor Relations Contacts Chiugo Ndubisi Cndubisi@diamondbank.com Ag. Chief Financial Officer +234 (1) 448 9832
Ifeatu Onwuasoanya IOnwuasoanya@diamondbank.com Head, Investor Relations +234 (1) 448 9866 |
More information can be found at www.diamondbank.com