24th Apr 2017 16:13
Diamond Bank Plc
Audited Financial Results for the Year ended 31st December 2016
DIAMOND BANK PLC REPORTS TOTAL ASSETS OF N2.0 TRILLION
IN 2016 FINANCIAL YEAR
Full year highlights
Financial
· Non-interest income increased by 6.9% to N53.9 billion, fueled by growth in transactional fees.
· Profit before tax dropped to N5.0 billion due to a combination of lower net interest income and increased impairment charges.
· Impairment charges increased by 7% to N59.0 billion due to prudent provisioning in response to significant challenges in the wider economy.
· Interest expense dropped by 12.6% over the 12-month period due to a competitively priced and efficient deposit mix. One of our strategic focus areas is to continue growing the retail liability base.
· Personnel and operating expenses improved by 0.5%
· Total comprehensive income increased by 53.1% year on year to N12.1 billion.
· Total assets increased by 16.9% to N2.05 trillion as at December 31, 2016.
Strategy
· The organizational restructuring, implemented at the beginning of 2016, continues to create value from a streamlined business, improved service delivery and cost containment.
· An Enduring focus on expanding service delivery through digital channels provide scale and efficiencies.
· Throughout 2016 we increased the number of services available on our alternate delivery channels (ADC), such as mobile banking, ATMs, Internet banking and POS. Our "Mobile First" philosophy is paying off, as revenue from mobile banking increased from N0.41 billion in 2015 to N2.6 billion in 2016. This accounted for 19.2% of N13.4 billion ADC revenue in 2016. Our e-payment solutions that focus on convenience, lifestyle, efficiency and mobility continues to gain traction with expanded revenue from ATMs, cards/POS and online banking.
· Diamond Mobile Apps usage continues to grow as transaction count increased from 6.8 million to 11.0 million, while transaction volume increased from N6.9 billion to N11.5 billion year on year. Retail customer count stands at over than 13 million.
· New and existing partnerships are continually nurtured to drive breakthroughs into new markets. Recruitment of new vendors into our merchant network is ongoing, and our track record with non-profits such as the Gates Foundation, and Enterprise Development Center of LBS have helped us unlock entrepreneurship potentials across different demographics. Building on these strengths, Bank of Industry recently appointed the Bank as a partner in the administration of the N140 billion Government Enterprise Empowerment Program (GEEP).
· Despite economic headwinds, Diamond Bank continues to build an attractive business underpinned by a robust balance sheet, improved liquidity and capital buffers.
Commenting on the results, Chief Executive Officer, Mr. Uzoma Dozie said: "In line with our expectations, 2016 was a very difficult year for the country and industry, and a challenging one for the bank. Nevertheless, on an aggregate basis, we succeeded in growing market share. This was made possible by our abiding focus on a technology-led retail strategy, the restructuring of our business to sharpen response to market demands, cost containment, and the continued development of platforms and relationships to achieve and manage scale in the future."
"As we move into 2017, the fundamentals of the bank remain very strong and it continues to generate operating profits that are comparable to any of its peers, as evidenced by the 2016 financial results. However, although not unique to Diamond, impairments in the bank's loan portfolio continue to impact financial performance. Therefore, mitigating the impact of impairments and improving the quality of loans underwritten, remain priorities for the bank in the year ahead. Importantly, however, our regulatory capital remains strong. Liquidity of the bank also remains well above the guidance ratio stipulated by CBN."
"Looking to the year ahead, we believe the macro conditions and other external factors will remain challenging. However, by pursuing our technology-led retail strategy, and focus on innovation and scalability, the bank is well-placed to benefit in the medium to long term from the favourable fundamentals in Nigeria, namely a large population, many of which remain unbanked. This strategy stands to benefit all stakeholders, including our shareholders and customers in the long run."
Strategic overview
There has been much positive progress over the last 12 months, with clear signs that the technology-led retail strategy is proving successful. Specifically, throughout 2016 Diamond Bank focused on cost containment, driving operational efficiencies and the roll-out of technology and innovation for improving customer experiences and access to financial services.
The restructuring of Diamond Bank's operating model in particular, was a key development completed in the year. Following its successful implementation, the emerging model has improved customer engagement, strengthened Diamond Bank's value chain approach to business and delivered efficiencies across the bank. These measures have helped to improve Diamond Bank's low-cost deposit base from the retail segment, whilst also facilitating growth in non-interest income and a reduction in interest expenses.
For sustained growth and profitability in 2017, Diamond Bank remains committed to its technology-led retail strategy.
Group Statement of Comprehensive Income
31 Dec. 2016 N'000 | 31 Dec. 2015 N'000 | YoY Change | |
Interest and similar income | 149,571,434 | 157,860,427 | (5.3%) |
Interest expense | (42,346,262) | (48,454,172) | 12.6% |
Net interest income | 107,225,172 | 109,406,255 | (2.0%) |
Impairment Charge | (59,024,736) | (55,172,109) | (7.0%) |
Net fee and comm. & other income | 53,886,572 | 50,404,142 | 6.9% |
Net operating income | 102,087,008 | 104,638,288 | (2.4%) |
Personnel expenses | (32,535,081) | (31,904,402) | (2.0%) |
Operating expenses | (64,517,790) | (65,641,155) | 1.7% |
Profit/(loss) before tax | 5,034,137 | 7,092,731 | (29.0%) |
Income tax | (1,535,172) | (1,436,108) | (6.9%) |
Profit/(loss) after Tax | 3,498,965 | 5,656,623 | (38.1%) |
Other comprehensive income (net) | 8,599,544 | 2,244,104 | 283.2% |
Total comprehensive income | 12,098,509 | 7,900,727 | 53.1% |
Group Statement of Financial Position
31 Dec. 2016 N'000 | 31 Dec. 2015 N'000 |
Change | |
Cash and cash equivalents | 329,906,916 | 361,166,936 | (8.7%) |
Financial assets held for trading | 6,870,235 | 13,116,843 | (47.6%) |
Derivative assets | 2,088,208 | 161,622 | 1,192.0% |
Assets pledged as collateral | 221,898,226 | 172,100,785 | 28.9% |
Loans to banks | 100,342,964 | 60,103,340 | 67.0% |
Loans and advances to customers | 995,334,118 | 763,634,827 | 30.3% |
Investment securities | 235,564,889 | 267,337,206 | (11.9%) |
Investment properties | 3,870,200 | 4,409,085 | (12.2%) |
Fixed and intangible assets | 72,792,142 | 67,518,381 | 7.8% |
Deferred tax | 4,984,388 | 4,984,544 | 0.0% |
Other assets | 76,146,470 | 38,698,711 | 96.8% |
Total assets | 2,049,798,756 | 1,753,232,280 | 16.9% |
Deposits from Banks | 103,409,297 | 115,819,590 | (10.7%) |
Deposits from Customers | 1,424,689,527 | 1,233,591,063 | 15.5% |
Current income tax liability | 2,027,948 | 1,697,816 | 19.4% |
Other liabilities | 62,457,895 | 46,217,258 | 35.1% |
Borrowings | 169,182,279 | 102,719,571 | 64.7% |
Long term debt | 61,323,847 | 38,577,527 | 59.0% |
Equity | 226,707,963 | 214,609,455 | 5.6% |
Total liabilities and equity | 2,049,798,756 | 1,753,232,280 | 16.9% |
Details for the Analysts conference call will be made available shortly.
Key Ratios & Per Share Data
• Capital Adequacy Ratio of 15.0% (16.4% Dec 2015)
• Loan to deposit ratio at 73.9% (66.5% Dec 2015)
• Liquidity ratio (Bank) 42.3% (52.8% Dec 2015)
• Cost of risk 6.3% (6.7% Dec 2015)
• Coverage Ratio of 79.5% (103.4% Dec 2015)
• Net Interest Margin of 5.9% (6.1% Dec 2015)
• Cost to income ratio of 60.2% (61.0% Dec 2015)
• NPL ratio of 9.5% (6.0 % Dec 2015)
• ROAE of 1.6% (2.7% Dec 2015)
• EPS of 15(k) (24k Dec. 2015)
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, its 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 Bank of Beirut; BanqueLibano-Francaise, BHF Bank, 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.Please click on the link below to view the associated PDF Documenthttp://www.rns-pdf.londonstockexchange.com/rns/1660D_-2017-4-24.pdf
Investor Relations Contacts Chiugo Ndubisi [email protected] Chief Financial Officer +234 (1) 448 9842
Ifeatu Onwuasoanya [email protected] Head, Investor Relations +234 (1) 448 9866 |
More information can be found at www.diamondbank.com
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