Diamond Bank Profit After Tax Falls by 88% to N5.6 Billion

In line with its earlier profit guidance, Daimond Bank Plc on Wednesday reported a fall of 88 per cent in profit after tax for the year ended December 31.2015. Although the bank recorded a growth of 4.3 per cent in gross earning, its profit before and after tax fell significantly.

Diamond Bank ended the year with gross earnings of N217 billion, up from N208 billion in 2015. But profit before tax fell from N28.1 billion in 2015 to N7.1 billion, while profit after tax stood at N5.6 billion, down from N25.6 billion. The lower bottom line was affected by high net impairment loss on financial assets, which jumped by 109 per cent from N26.3 billion to N55.2 billion.

In his comments, the Chief Executive Officer of Diamond Bank, Mr. Uzoma Dozie, said: “2015 was undoubtedly a challenging year for us owing to a mixture of external factors not limited to regulatory headwinds and a difficult macroeconomic environment. Whilst this led to additional impairment charges following a prudent review, we have further tightened the criteria for loan originations in order to better align our loan portfolio with the macroeconomic conditions. As a result, we are confident that the overall quality of our loan book remains high.”

According to the CEO, a number of mitigating actions are being taken to address and drastically reduce these challenges, thereby putting Diamond Bank in a better position to achieve better results and strong earnings for the shareholders in the current business year.

He highlighted the transformation the bank was going through and remained positive that reliance on innovation, technology and lifestyle priorities will drive banking in the future and Diamond is well positioned to take advantage of this. He expressed optimism about the growth and value to shareholders and restated his commitment to overseeing full implementation of the bank’s digital-led retail strategy.

“Importantly, there are clear signs that the new strategy and initiatives to reduce costs are proving successful and are reflected in certain financial indicators. Fundamentally, by taking various mitigating actions and implementing the retail-led digital strategy, Diamond Bank has an excellent platform from which to achieve growth, profitability and shareholder returns in the year ahead. New retail accounts opened has grown more than fivefold and with a network of over 24,000 agents as at December 2015, active account ratio continues to improve. These create a measure of confidence going into the future,” said Dozie.