NAIROBI, KENYA, NOVEMBER 23 — Diamond Trust Bank (DTB) has posted a Ksh5.2 billion net profit for the period ended September 30, becoming the latest tier-1 lender to report positive earnings in the third quarter of the year.
The Nairobi Securities Exchange (NSE) listed bank’s profit has jumped 10.6 per cent from Ksh4.7 billion reported in a similar period last year.
This came on a background of a growing customer base, investments in government securities and modest operating expenses.
The regional lender saw customer deposits grow 6.3 per cent during the first nine months of this year to close at Ksh282.2 billion. This is up from Ksh265.5 billion same period last year.
The bank recorded positive gains from investments in government securities as interest income from the low-risk investments grew 11.5 per cent to Ksh9.7 billion. This is up from Ksh8.7 billion it made last year.
Deposits and placements with banking institutions earned the lender Ksh214.2 million in interest, an increase compared to last year’s Ksh173.6 million.
Interest income from loans and advances slightly edged down 1.8 per cent but remained the biggest at Ksh16.5 billion compared to Ksh16.8 billion in September last year.
Total interest income closed at Ksh26.5 billion, a 3.1 per cent growth compared to Ksh25.7 billion posted in September 2017.
Net interest income closed the period at Ksh11.5 billion up from Ksh11.2 billion, as the lender incurred higher interest expenses on customer deposits.
The bank’s loan book (net loans and advances to customers) on the other hand grew marginally to Ksh197.7 billion from Ksh196.3 billion last year, a 0.7 per cent increase.
During the period, DTB managed to cut its total operating expenses by a slight 0.2 per cent to Ksh10.83 billion, down from Ksh10.85billion spent in a corresponding period last year.
Staff costs was among the single biggest spend as the lender used Ksh3.1 billion in the nine months. This is 6.9 per cent up compared to the Ksh2.9 billion spent last year.
Directors emoluments cost the lender Ksh94.6 million, an 11.3 per cent jump from Ksh85.0 million spent in a similar period last year.
Rental charges took Ksh652.3 million, an increase compared to last year’s Ksh586.6million.
During the period, Gross Non-Performing loans reduced 1.8 per cent to Ksh16.3 billion, compared to Ksh16.6 billion last year.
This came as insider lending reduced to a total Ksh4.5 billion compared to Ksh4.7 billion in September 2017, despite an increase on staff borrowing which increased to Ksh1.47 billion from Ksh1.43 billion.
Pressure on the insider loan book was reduced by directors, shareholders and associates who slightly eased their borrowing to Ksh3.03 billion in the nine months, compared to Ksh3.34 billion similar period last year.
The lender which has over 130 branches in Kenya, Tanzania, Uganda, and Burundi, some of which are 24/7 digital branches, closed the nine months period with a total asset base of Ksh384.9 billion.
This is a 7.8 per cent growth compared to Ksh357.2 billion it had in September last year.
Other tier-1 banks that have announced results for the nine months include KCB Group which posted a net profit of Ksh18 billion, Equity Group Ksh15.8 billion profit, Co-operative Bank Ksh10.3 billion profit and Barclays Bank of Kenya Ksh5.4 billion net profit.
An affiliate of the Aga Khan Development Network (AKDN), DTB has operated in East Africa for over 70 years.
According to the management, “DTB’s focus on the SME sector and commitment to enhancing convenience for customers through branch network expansion has driven the Bank’s growth in recent years.”