Diamond Trust Bank Kenya Plc (NSE: DTK) has posted a 6.2% y/y growth in net profit of Ksh 6.0Bn in the third quarter ended September.
This was helped largely by Non-Interest Revenue (NIR) which grew 5.7% y/y to cushion income against the 7.5% y/y drop in Net Interest Income (NII).
“The growth in NIR was supported by an 18.0% y/y increase in Forex trading income to Ksh 1.4Bn despite a 4.6% y/y decline in fees and commissions on loans to Ksh 1.0Bn. The growth in NIR, coupled with the 7.5% y/y drop in NII propelled NIR contribution to total income from 21.7% in 3Q18 to 24.1% in 3Q19,” according to Genghis Capital.
The lender’s operating income was dropped 4.6% y/y to Ksh 18.2Bn. Total operating expenses fell 12.5% y/y to Ksh 9.5Bn attributed to a 63.7% y/y decline in loan provisions to Ksh 0.9Bn.
Total other operating expenses were relatively subdued, growing 2.0% y/y to Ksh 8.6Bn.
Deposits were relatively unchanged y/y at Ksh 283.1Bn as the loan book declined 2.9% y/y to Ksh 192.0Bn and similarly, investment in government securities also remained depressed (-0.6% y/y) at Ksh 127.5Bn.
“We expect the bank to continue enhancing its NIR lines, though the performance of NII should recover following the repeal of the interest rate caps,” says Genghis Capital Commentary in the 3Q19 Earnings Note.
Source: Genghis Capital