Diamond Bank Shares Shed 5% after Posting Dismal 2017 Results

By Dipo Olowookere

Last Friday, Diamond Bank Plc finally released its audited financial statements for the year ended December 31, 2017.

The results fell short of what the market was expecting and investing public did not hide their feelings about this.

At the close of transactions on the floor of the Nigerian Stock Exchange (NSE) on Friday, the stock suffered 5 percent loss.

A look at the 2017 earnings of Diamond Bank, a tier-two lender in Nigeria, showed that it recorded a loss before tax of N11.6 billion compared with the profit before tax of N3.4 billion it achieved in 2016, while it had loss after tax of N9 billion during the period under review against the profit after tax of N3.5 billion in 2016.

Business Post reports that these losses occurred amid the 3 percent growth recorded in the gross earnings of the lender because as at December 31, 2017, Diamond Bank’s gross earnings stood at N189.6 billion in contrast to N184.1 billion as at December 31, 2016.

The bank said in its financial statements that it raked N145.3 billion as interest income compared with N127.8 billion in 2016, while the interest expense jumped to N47 billion from N31.3 billion, leaving the net interest income at N98.3 billion versus N96.5 billion in 2016.

For its balance sheet, the total assets of Diamond Bank as at December 2017 stood at N1.7 trillion against N2.1 trillion in 2016, while the total liabilities reduced to N1.5 trillion from N1.8 trillion.

The above results did not reflect what investors were expecting especially when its peers like Fidelity Bank, FCMB and Wema Bank had earlier posted fair and positive financial statements.

When the market closed two days ago, the stock dropped to N1.90k per share, losing a total of 9.95 percent of its share value during the week at the NSE.

Business Post reports that with the results the financial institution released last Friday, some investors are already getting worried and do not want to be caught unawares especially with recent sale of the company’s assets outside Nigeria.

This and other factors may make some investors to quickly offload the stock from their portfolio from tomorrow (Monday) and it might not surprise anyone to see Diamond Bank on full offer this week with fears that the shares may drop to about N1.25k because of the disappointment.

However, some investors have expressed optimism that Diamond Bank will get back on its feet, pointing out that the stock is one to look out for because of its positive prospect in the future.

Diamond Bank presently has an EPS of 1.76 and PE of 1.08 with 14.5 billion unit share valued at N27.5 billion.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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