Diamond Trust Bank Issues Profit Warning on Increased Loan Provisions

Diamond Trust Bank Kenya Receives KSh500 million Covid-19 SME Support Loan from IFC

DTB’s group chief executive, Nasim Devji

Diamond Trust Bank’s (DTB) is the latest lender to issue a profit warning for the year ended December 31.

The lender in a statement to Khusoko said its performance for the year was affected by the Covid-19 containment measures which hurt trade flows and created uncertainty on export, hospitality, real estate, aviation, tourism and agribusiness subsectors, forced it to increase loan loss provisions.

“This is primarily due to an increase in impairment provisions in light of the Covid-19 pandemic as well as an increase in restructured and delayed loan repayments as the Covid-19 impact on customers intensified during the year,” said DTB.

The banks’ Q3’2020 Profit before tax fell by 24.0% to Kshs 6.6 billion, from Kshs 8.7 billion in Q3’2019. 

The bank’s asset quality deteriorated, with the Non-performing Loans ratio increasing to 10.5% in Q3’2020, from 8.9% in Q3’2019, due to the faster 25.0% growth in gross NPLs, which outpaced the 11.2% growth in gross loans. 

Borrowings increased by 60.8% to Kshs 20.2 bn from Kshs 12.6 billion in Q3’2019.

Other lenders that have issued a profit warning include ABSA Kenya, Standard Chartered, I&M Holdings and NCBA Group.