Annual Financial Report

Diamond Bank Plc

Group Audited Results for the period ended 31 December 2010

DIAMOND BANK PLC REPORTS A RETURN TO PROFITABILITY FOR THE TWELVE MONTHS PERIOD ENDED 31 DECEMBER 2010

LAGOS, NIGERIA - 29 March 2011 - Diamond Bank Plc, (Bloomberg: DIAMONDB NL/ Reuters: DIAMONB.LG) ("Diamond Bank" or the "Group"), the provider of comprehensive banking and other financial services to corporate and individual customers across Nigeria and Africa announces its Group audited results for the twelve months ended 31 December 2010.

Speaking from headquarters in Lagos, Alex Otti, Managing Director of Diamond Bank commented: "These improving results and our return to profitability are as a result of our employee's hard work over the past few years. As the incoming Managing Director of the Group, I am in the exciting position of leading a Bank that has taken tough actions to strengthen its platform and now has the opportunity to become one of Nigeria's top performing banks by 2012."

"I have identified a number of key strategic initiatives that need to be addressed in order for us to reach our goal and I look forward to working with the Group to deliver top quartile returns for our shareholders, consistent service excellence and making our Company an employer of choice in all areas of expertise."

Group Financial Highlights

Profit & Loss - sustained net interest and operating income

·; Gross earnings down 16% to N91billion for the 12 months period ended 31 December 2010 (N108 billion 12 month period ended 31 Dec 2009)*

·; Net interest income down 16% to N49.0 billion (N42.2 billion Dec 2009)*

·; Operating income up 8% to N74.2 billion (N68.8 billion Dec 2009)*

·; Operating profit up 12% to N27.6 billion (N24.6 billion Dec 2009)*

·; Provision for risk assets N22.9 billion

·; Profit before tax N4.77 billion (loss of N23.8 billion Dec 2009)*

·; Profit after tax N1.3 billion (loss of N16.8 billion Dec 2009)*

·; Diluted EPS 9 kobo

* Given the Group had an 8 month audited financial year in 2009, comparative figures have been annualized using management accounts for the first four months of 2009 

Balance Sheet -

·; Total Assets down 9% to N594.8billion (N650.4 billion Dec 2009)

·; Total Loans to customers down 5% to N312.2 billion (N329.8 billion Dec 2009)

·; Customer deposits down 15% N412.0 billion (N482.0 billion Dec 2009)

Key Ratios -

·; Cost / income ratio excluding cost of risk 62.8% (70.9% Dec 2009)

·; Annualized ROAE 1.2%

·; Risk adjusted capital ratio of 16.6%

·; Liquidity ratio of 41.5% (CBN Statutory minimum of 25%)

·; Loan to deposit ratio of 83.7%

·; NPL ratio 14.8% (18.3% Dec 2009)

·; Cost of risk 6.4% (10.4% Dec 2009)

Strategic Business Units - Highlights

Retail Banking

- "2010 was characterized by sustained growth across our retail unit. Non fee income from customers averaged N320 million in 2010 on a customer base that grew from 1.3 million to 1.7 million. Retail deposits which include our MSME and personal customers were approaching N176 billion by year end and our retail liabilities now represent over 50% of the bank's total liabilities. Meanwhile we grew our retail asset base to N28 billion in 2010 up from N10 billion at the start of the year. These figures demonstrate how the bank is making steady progress towards penetrating the retail space in Nigeria setting us on a sustainable path in this strategic growth market for the coming years." said Gary Marsh, head of the Retail Banking Unit.

Corporate Banking

- Commenting on the results from Diamond Bank's headquarters in Victoria Island, Uzoma Dozie, ED Corporate Banking said: "In compliance with our enhanced risk management policies the Corporate Banking unit continued to unwind positions carried over from the economic slowdown in 2009. This has enhanced liquidity and reduced NPLs. Provisions are starting to come back to normal levels as the economy returns to its pre 2008 growth path, this bodes well for the unit as we take up new opportunities arising from telecoms and government infrastructure spending in 2011."

Operational Highlights

- The retail banking segment continued to grow and has contributed to the significant improvement in the Group's balance sheet efficiency. Net interest margin increased from 7.5% at year end 2009 to 10.1% at year end 2010 following the drop in cost of funds from 7.4% at year end 2009 to 3.4% at year end 2010.

- Our enhanced risk management policies and remedial asset management has contributed to the reduction in cost of risk from 10.4% at year end 2009 to 6.4% at year end 2010. It is expected that future provisioning will be based on normal business operation (excluding impact of divestment from subsidiaries).

- The gains of Project Sparkle are beginning to pay off as the Group recorded a significant reduction in cost to income ratio to 62.8% from 70.9% recorded in December 2009.

 (For the detailed Profit and Loss Account, Balance Sheet, Cashflow statement and notes to the accounts, please visit our website - www.diamondbank.com)

- ENDS-

For further information please contact:

Chiugo Ndubisi [email protected] +234 (1) 448 9832

Africa Practice / Financial Dynamics

London:

Ed Gascoigne-Pees [email protected] +44 (0)20 7269 7132

Kat Bloom [email protected] +44 (0)20 7269 7223

Lagos:

Nick Chambers [email protected] +234 813 574 3544

Notes to editors:

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 one of the leading banks in Nigeria* - respected for its excellent service delivery, driven by innovation and operating on the most advanced banking technology platform in the market. Diamond Bank has over the years leveraged on its underlying resilience to grow its asset base and to successfully retain its key business relationships.

We have retained excellent banking relationships with a number of well-known international banks, allowing us to provide a bouquet of world class banking services to suit the business needs of our clients. These international banking partners include Citibank; HSBC Bank; ANZ Banking Group; ING BHF Bank AG; Standard Chartered Bank; Belgolaise Bank S.A; Deutsche Bank; Commerzbank; and Nordea Bank Plc.

* Diamond Bank's A- rating by Fitch Ratings and A+ rating by GCR, reflects the bank's sustainable liquidity, sound and professional practices and good standing as a high investment grade institution.

More information can be found at www.diamondbankplc.com

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