Diamond Trust Bank Kenya on Thursday reported a 36 percent decline in its profit after tax to Kshs 2.6 billion for the first half of the year compared to Ksh 4.1 billion.
This was attributed to a decline in total interest income and an increase in operating expenses due to increased loan loss provisioning.
Loan provisions surged 249.2 percent year on year to KSh1.9 billion. Non-Interest Revenue grew 5.9 percent and 1.2 percent growth in Net Interest Income.
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Operating income was up 2.3 percent to Ksh 12.4 billion.
Total operating expenses before provisions rose 7.3 percent to KSh 6.1 billion.
The bank grew deposits during the quarter to settle at KSh280.4 billion.
The loan book grew 5.6 percent to KSh201.5 billion and investment in government securities increased 9.7 percent to KSh 132.5 billion.
The Bank restructured loans worth Ksh 64 billion since the outbreak of the pandemic representing 42 percent of DTB’s loan book.
We expect this to result in a further decline in the bank’s interest income.
“DTB’s non-branch transactions rose significantly to 87 percent up from 81 percent last year on account of the increased adoption of mobile and internet banking by the Bank’s customers. We expect this to remain a key focus for the bank in order to boost NFI growth FY2020,” Sterling Capital Research commentary.
On the other hand, AIB-AXYS Africa is of the view that “The surge in provisions was as expected. We remain worried of the rising costs given flat growth in the top line (revenue).”
