The audited 2016 financial results as approved by the Central Bank of Nigeria (CBN), Diamond Bank posted 53 per cent growth year-on-year in Total Comprehensive Income to N12.1 billion with non-interest income surging by 6.9 per cent to N53.9 billion, ostensibly stimulated by transactional fees.
Although the ripple effect of the tough operating business environment impacted negatively on the performance of many organisations in the country but Diamond Bank in the financial results demonstrated its ability to maintain appreciable growth as revenue from non-interest income, especially its mobile banking increased from N0.41 billion in 2015 to N2.6 billion in 2016.
This accounted for 19.2 per cent of N13.4 billion ADC revenue in 2016 with Diamond Mobile Apps usage surging from N6.8 million to 11.0 million, while transaction volume increased from N6.9 billion to N11.5 billion year on year. The Bank’s retail customer count currently stands at more than 13 million.
Speaking from the Bank’s Corporate Head Office in Lagos, the Chief Executive Officer, Uzoma Dozie, said that the Bank’s stable growth and continued success in spite of the harsh economic headwinds, is hinged on implementing retail and digital-led strategies that are primed to promote sustainable growth and profitability in the long term.
According to the Bank’s CEO, “the restructuring of Diamond Bank’s operating model was a key development completed in the year. Following its successful implementation, the emerging model has improved customer engagement, strengthened Diamond Bank’s value chain approach to business and delivered efficiencies across the Bank. These measures have helped to improve Diamond Bank’s low-cost deposit base from the retail segment, whilst also facilitating growth in non-interest income and a reduction in interest expenses”.
In the months ahead, the Bank will continue to deploy new technologies and digital applications to drive financial inclusion and convenient banking amidst a decline in the pace of economic activities and weak economic fundamentals. The Bank will also continue to deepen its retail strategy to mop up low cost fund, expand its credit creation structure and increase market share in all market segments.
Whilst loans to customers increased by 30.3 per cent to N995.33 billion in 2016 from N763.63 billion in the previous year, loans to other banks surged by 67.0 per cent to N100.3 billion from N60.1 billion in the previous business year. Despite the ravaging effect of the implementation of Treasury Single Account (TSA) by the Federal Government and the CBN, customer deposits jumped to N1.4 trillion from N1.2 trillion in the previous year, representing 15.5 per cent increase and the strength of confidence in the Bank’s strategic outline.
Also, the Bank’s total assets surged to a new high of N2.04 trillion from the previous year’s N1.75 trillion, which represents 16.9 per cent increase. However, the Bank’s impairment charges grew by 7 per cent to N59.024 billion, reflecting its prudent provisioning, which is aimed at strengthening performance in the business years ahead.
Although Diamond Bank has continued to grow its corporate and mid-tier business segments, but according to the CEO, the Bank’s focus remains on retail banking and providing convenient and easy banking to the Micro, Small and Medium-scale Enterprises (MSME) segment, adding that the concept of value chain management and the deployment of digital strategies will help provide end-to-end solution and ultimately improve value for the Bank and the customers.
He said, ““As we move into 2017, the fundamentals of the Bank remain very strong and it continues to generate operating profits that are comparable to any of its peers, as evidenced by the 2016 financial results. However, although not unique to Diamond, impairments in the Bank’s loan portfolio continue to impact financial performance.
“Therefore, mitigating the impact of impairments and improving the quality of loans underwritten, remain priorities for the Bank in the year ahead. Importantly, however, our regulatory capital remains strong. Liquidity of the Bank also remains high and is well above the guidance ratio stipulated by CBN”.
Looking to the year ahead, he said, “We believe the macro conditions and other external factors will remain challenging. However, by pursuing our technology-led retail strategy and with our focus on innovation and scalability, the bank is well-placed to benefit in the medium to long term from the favourable fundamentals in Nigeria, namely a large population, many of which remain unbanked. This strategy stands to benefit all stakeholders, including our shareholders and customers in the long run.”