Diamond Bank Revenue Up by 3.2% - By Sarah NEGEDU
Despite the regulatory headwinds that impacted business operations in in the 3rd Quarter, Diamond Bank stayed focused on strategy implementation showing strong resilience against the tide. The Bank cleaned its books of additional toxic assets and recorded strong growth in revenue, while setting forth a clear and realisable business roadmap that would promote stronger and sustainable growth in Q4 and the years ahead.
Although industry watchers and analysts had predicted a decline in, or flat revenue at best, due to unfavourable macro environment and challenging regulation, Diamond Bank maintained its status as the fastest growing retail bank as well as displayed resilience in earnings. Showcasing its nine months performance scorecard, released on the floor of the Nigerian Stock Exchange on Monday, October 26, 2015, it reported growth in total revenue, which jumped from N151.6 billion recorded during the same period in 2014 to N156.5 billion, representing 3.2 per cent increase over the previous year. Also, the Bank’s net interest income increased to N85.2 billion against N82.6 billion in the first nine months of 2014.
However, the impact of new regulation by the Central Bank of Nigeria and the Federal Government, especially the change in Cash Reserve Ration (CRR) to 31% and later 25% as well as implementation of the Treasury Single Account continued to be felt at the Bank and the industry generally. This partly caused a decline in deposits by about N226 billion and consequently led to a drop in total assets by 8.5% year on year.
The Bank, in a move to build a healthier balance sheet that will assure sustainable value to shareholders had earlier in the year notified them that it was restructuring its balance sheet to let go highly priced fixed deposits in favour of low cost deposits, which has very low investment risk and predictable favourable returns.
In his comments, the CEO of the Bank, Uzoma Dozie, highlighted the transformation the Bank was going through and remained positive that reliance on innovation, technology and lifestyle priorities will drive banking in the future and Diamond is well positioned to take advantage of this. He expressed optimism about the growth and value to shareholders and restated his commitment to overseeing full implementation of the Bank’s digital led retail strategy.
In a statement accompanying the nine months result to the Nigerian Stock Exchange, the CEO pointed out that “We at Diamond Bank, are pleased to announce continued success in implementing our retail-led strategy for profitable business growth. Despite the challenging macroeconomic environment, the Group’s total revenue increased by 3.2% to N156.5 billion from N151.6 billion recorded for the same period in 2014. Similarly, the Group’s net interest income increased to N85.2 billion against N82.6bn for the same period last year.