Background
Diamond Bank Plc, the largest tier II bank in Nigeria (by total assets), was established as a private limited liability company in, March 1991 and received a universal banking license in February 2001.
In 2005, the bank successfully merged with Lion Bank, retaining the name Diamond and was listed on the on the Nigeria Stock Exchange following a private placement offering.
The bank listed its GDRs on the London Stock Exchange in 2008- the first for any Nigeria bank. The major shareholder in Diamond is the Dozie brothers’ family firm Actis also has a c.15 stake in the bank.
Diamond Bank has an increased focus on the retail and SME banking segments in Nigeria and is making concerted efforts to maintain its leadership position in the mobile money business as well as actively promoting its internet banking platform.
The bank has a network of 250 branches, total assets of N1.51 trillion, and shareholders’ funds of N138.85 billion as at December 2013.
Financial results for the first quarter 2014.
Diamond continues its impressive performance as first quarter 2014 results showed a tremendous growth in all analytical parameters.
The bank’s earnings results beat all analysts’ expectation as it was able to triumph over the tightening policy of the Central Bank of Nigeria (CBN). This policy has been crimping the growth of most banks in the country.
For the first quarter of 2014 (Q1’14) the bank grew interest income by 13 percent y/y to N38.24 billion compared to N33.84 billion same period of the prior year 2014.
Profit before tax (PBT) jumped by 5.84 percent y/y to N9.24 billion in Q1 2013 from N8.73 billion in Q1’2012.
For the first quarter through March 2013 Diamond Bank moved Profit after tax (PAT) by 34.48 percent y/y to N8.44 billion as against N6.29 billion in the corresponding period of 2012- backed by a 67.4 percent reduction in income tax to N794 million.
Earnings per share EPS increased by 34.88 percent to 58k from 43k in FY 2013.
With this fantastic performance, the bank is gradually climbing the ladder of success to become one of the top big banks in Nigeria (a tier one bank).
The resources of the owners of the bank have been used generate more profits the Return on Average Equity ROaE spiked to 57.41 percent in Q1 2013 from 45.59 percent Q1 12.
Additionally Return on Average Assets ROaA followed suit as it jumped to 5.34 percent in 2013 from 4.16 percent in 2012.
Net operating income in the review period increased by 18.91 percent y/y to N32.44 billion compared to N25.51 billion in 2012.
Interest expenses in the review period were up by 15.34 percent to N10.75 billion from N9.32 billion in Q1 2012.
Net interest expense also grew by 12.51 percent y/y to N27.49 billion in 1M13 as against N24.51 billion in 1M12.
Total expenses were up by 25.06 percent y/y to N23.2 billion in 1M13 as against N18.55 billion in 1M12.
Customer’s loans and advances for three months through March 2013 increased marginally by 4.23 percent y/y to N853.14 billion compared to N818.52 billion in Q1 2013.
Deposits from customers in the period under remained flat at less than 1 percent to N1.75 trillion, while loans to deposit ratio jumped to 48.86 percent from 46 percent in 2012.
Share performance and Outlook
The bank closed trading on a light note on April 15th 2014 as its shares closed at N6.22 on the floor of the Nigeria Stock Exchange.
The bank had a market capitalization of N93.22 billion on the same day.
The bank had a price to book ratio (PBR) of 0.83x, while it also had a price to sales ratio of 0.65x
BALA AUGIE
