Following strong growth in Diamond Bank’s balance sheet and tremendous upsurge in assets from N1.52trillion to N1.93trillion, Group Managing Director and Chief Executive Officer, of the Bank, Uzoma Dozie, has predicted a better run for the company in 2015 propelled by massive investments in digitization.
For the year ended December 31, the group recorded a growth of 27.3 per cent in total assets from N1.52 trillion in the previous year to N1.93 trillion. This was driven mainly by growth in deposits, which surged 23.8 per cent from N1.21 billion in 2013 to N1.49 billion, demonstrating the Bank’s strong ability and network to generate cheap deposits from the retail and middle market segments. Also, the Bank grew its loan portfolio to customers from N689 billion to N791 billion, representing 14.8 per cent increase.
Speaking on the results, Dozie stated that the performance and steady growth in the BY under review despite the inclement operating environment, was the result of management’s focus on the strategic projections.
“We at Diamond Bank are pleased to announce continued success in implementing our strategy across the group, following another year of strong top line growth and an asset base that grew from N1.5 trillion to N1.9 trillion in 12 months”.
Gross earnings increased by 15.0 per cent from N181.2 billion in 2013 to N208.4 billion, showing an increase of 9.6 per cent in net operating income which stood at N116.3 billion in 2013 to N127.4 billion. However, Profit Before Tax (PBT), declined marginally by 12.5 per cent from N32.1 billion in the previous year to N28.1 billion, reflecting the harsh regulatory headwinds that hallmarked business operations in 2014.
According to the CEO, “Amidst regulatory headwinds that characterised the industry, and a dynamic macroeconomic environment, growth was recorded in operating income although our profit before tax dropped from 2013 levels on the back of higher operating expenses and loan impairment charges. For further growth and profitability in 2015, we shall implement our digital banking strategy rigorously, and this will go a long way to reduce operating costs and drive customer acquisition as we seek to increase market share by converting existing bank account holders and attracting those who are owning formal bank accounts for the first time.”
The Bank maintained very strong showing in its capital structure, as the group’s capitalisation improved significantly by 50.5 per cent due to a combination of the impact of its highly successful rights issue in the last quarter of 2014, as well as the capitalisation of profits for the BY. Shareholders’ funds increased from N138.7 billion as at December 31, 2013 to N208.8 billion as at December 31, 2014, making Diamond Bank one of the most capitalised banks in Nigeria.
The strong capital base reflects the Bank’s resilience and its preparedness to grow business in the future despite the implementation of Basel 2 and 3 by the Central Bank of Nigeria (CBN) and the related high capitalisation requirement. On the enhanced capitalisation, the Bank recorded enviable performance, as the return on average equity moved from 23.1 per cent in 2013 to 14.7 per cent while return on average asset decreased from 2.1 per cent to 1.5 per cent. These were driven purely by efficient growth in the volume of business represented by increase in loan book, and investment securities.
Speaking further on the sterling performance of the Bank, the CEO stated, “We are encouraged by these positive results and sustenance of our business growth, and affirm our commitment to continue delivering healthy shareholder returns in 2015 and beyond.”
Diamond Bank is one of the eight banks designated as systemically important banks by the Central Bank of Nigeria (CBN) in 2013 and raised $200 million Eurobonds during the BY to finance its long term foreign currency assets.