Diamond Bank Nets N12.896bn 2017 Loss, On Interest Expense Growth, 68.6% Trading Income Slip

After weeks of anxiety, the board of Diamond Bank Plc presented its audited financials for the year ended December 31, 2017, the high point of which was the N12.896bn loss after tax, representing a 744.74% slip, compared to the N2bn profit reported in the corresponding period of 2016.
The loss was propelled by a combination of the significant 50.44% rise in interest expenses; a N56.83bn net impairment loss on financial assets, down from N57.015bn; just as trading income suffered a 68.61% dip from N12.426bn in 2016, to N3.9bn; among others.
Specifically, gross earnings for the period could only rise by 9% year-to-year to N203.3bn; with interest and similar income being the bulk at N145.322bn, as against the prior N127.811bn, a 13.7% increase; while interest expense rose to N47.038bn from N31.267bn, a 50.44% growth; resulting in net interest income of N98.284bn, up from N96.543bn.
Net interest income after impairment loss on financial assets crawled 4.87% up to N41.453bn, as against the previous N39.527bn. Fee and commission income dropped by 12.22% from N32.597bn in 2016 to N28.615bn; net trading income stood at N3.9bn, down by 68.61% from the N12.426bn reported in the previous full-year.
Other operating income recorded 91.26% jump from N1.334bn to N2.552bn; net gain from other financial instruments at fair value through profit or loss dropped by 25.94% from N1.051bn in 2016 to N778.412m; just as net operating income suffered an 11.09% slip to N77.3bn from N86.937bn. Personnel expenses fell to N23.787bn from N26.878bn; depreciation and amortization rose slightly to N8.127bn from N7.592bn; just as operating lease expenses stood at N1.022bn from N1.03bn.
Other operating expenses increased by 16.32% to N55.909bn from N48.066bn; with total expenses at N88.847bn from N83.569bn; leaving loss before tax at N11.546bn, as against a profit of N3.368bn; while after tax loss was N12.896bn from a profit of N2bn; translating to loss per share of N0.56; as against the previous N0.09 profit.
Total Assets fell to N1.714tr, down by 16.34% from N2.049tr; while total liabilities declined by 18.19% from N1.823tr to N1.491tr.
A statement by the Diamond Bank noted the reviewed ownership of non-core assets to focus on the significant opportunities in Nigeria, particularly in retail banking, leading to the divestment from its businesses in West Africa, with that in United Kingdom set to follow.
To restore its technology-led retail banking strategy, the bank successfully delivered new initiatives, by building additional ecosystems and the expansion of customer services across different platforms. These include the DreamVille platform – the first Nigerian gamification portal for banking aimed at improving financial literacy and participation amongst youths.
The statement quote Uzoma Dozie, the bank’s chief executive as saying “although more work is to be done, particularly in relation to our oil and gas exposure, overall the quality of the loan book has improved. This will remain a key area of focus over the next 12 months. Looking ahead, I am optimistic that due to the actions we have taken as well as an improving economy, Diamond Bank will continue to make good progress and achieve greater profitability.’’