WorldStage Newsonline– Diamond Bank has released its fourth quarter (Q4) 2017 results which showed that it delivered a pre-tax loss of –N18.2 billion as against Q4 2016, no thanks to declines of -52% and 48% in funding and non-funding income and a 29% spike in loan loss provisions to N21.5 billion.
These negatives completely offset a -9% reduction in opex. Also the pre-tax loss narrowed to -N12.0bn on the profit after tax (PAT) line, thanks to a N3.9bn profit from discontinued operation (related to divestments from its UK and Benin subsidiaries) and a positive result of N2.9bn from other comprehensive income.
A lower effective tax rate of 3.2% compared with 188.5% in Q4 2016 also helped.
On a full year basis, the bank also reported pre-tax and after tax losses of –N11.5bn and –N3.0bn compared with profit before tax (PBT) and PAT of N3.4bn and N11.9bn in Q4 2016 respectively.
Following on from its underwhelming Q4 2017 results which were published earlier today, Diamond’s Q1 2018 results which were just published showed that earnings improved on a quarterly basis.
Although PBT of N1.3bn declined by -75% against Q1 2017, it was still an improvement over the pre-tax loss that the bank reported in Q4 2017. The decline in earnings in Q1 2018 was driven by marked reductions across all key headline items.
Pre-provision profits fell by -15%, driven by declines of 16% and 11% in funding and non-interest income. Although loan loss provisions declined by 18%, the reduction in both revenue lines proved significant and completely offset any positives from the lower impairment charges. Further more, PAT declined by 76% y/y to N1.0bn. Sequentially, PBT and PAT improved markedly over the pre-tax and after tax losses of –N18.8bn and –N12.0bn that the company delivered in Q4 2016.
Diamond Bank has outperformed the market year-to-date. The shares as at Monday have gained 27% compared with the 7% return on the index.
