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Diamond Bank’s Recent Performances Worry Shareholders, Investors

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Diamond Bank’s Recent Performances Worry Shareholders, Investors

By Modupe Gbadeyanka

Shareholders and investors at Nigerian stock market are really not happy with the results recently churned out Diamond Bank Plc.

Some of those who spoke with Business Post said they are disappointed with the performance of the mid-level financial institution lately.

For example, Diamond Bank, in its financial statements for the period ended December 31, 2017, declared a loss before tax of N11.6 billion compared with the profit before tax of N3.4 billion it achieved two years ago.

Also, the firm recorded a loss after tax of N9 billion during the period under review against the profit after tax of N3.5 billion in 2016.

During the period under review, fee and commission income dropped to N37.1 billion from N41.4 billion in 2016, while it slightly pruned down its fee and commission expense to N8.5 billion last year from N8.8 billion two years ago.

This left the net fee and commission income closing at N28.6 billion in 2017 against N32.6 billion in 2016.

Also, the net operating income went down to N77.3 billion last year from N86.9 billion a year earlier with the total expenses during the year under review at N88.9 billion against N83.6 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.

On Monday, July 30, 2018, the bank released its financial scorecard for the first six months of this year and the performance was not too different from the previous ones, leaving shareholders to worry about the health status of the bank.

For example, in H1 2018, the lender’s profit after tax went down by N6.2 billion or 77.6 percent to N1.8 billion from N8 billion, while the profit before tax declined by 69.3 percent from N9.5 billion to N2.9 billion.

Also, its interest and similar went down to N75 billion from N76.5 billion, while the interest and similar expenses shot up to N28.5 billion from N22.5 billion.

In the period under review, the net interest income dropped by 14 percent to N46.5 billion from N54.1 billion, while the impairment charge for credit losses closed at N18.4 billion as at June 30, 2018 against N18.9 billion as at June 30, 2017.

Also, the net interest income after impairment charge for credit losses stood at N28.1 billion versus N35.1 billion, with the fee and commission income at N19.2 billion in contrast to N19.2 billion.

Under the operating expenses, the lender posted N11.6 billion against N12.5 billion, representing 6.9 percent reduction, while the depreciation and amortization stood at N4.1 billion versus N4 billion, while the operating lease expenses closed at N507.9 million compared with N484.7 million, with the total expenses rising by 1.7 percent to N44.3 billion from N43.5 billion.

A look at the balance sheet by Business Post showed that the total assets dropped by 23.2 percent to N1.6 trillion from N2.1 trillion, while the total liabilities reduced to N1.4 trillion from N1.8 trillion with the shareholders’ fund shedding 7 percent to N221.5 billion from N238.2 billion.

The earnings per share (EPS) depreciated by 77.6 percent in the period under review to 8 kobo from 35 kobo, while the return on assets closed at 0.11 percent from 0.39 percent with the return on equity ending at 0.81 percent from 3.37 percent

However, the gross earnings grew by 0.62 percent to N98.5 billion in H1 2018 from N97.9 billion in H1 2017.

“Diamond Bank’s results lately are not encouraging. We don’t know what is wrong with the bank,” an investor in the nation’s bourse told Business Post on Tuesday.

But the Chief Executive Officer of Diamond Bank, Mr Uzoma Dozie, assured that all was well with the financial institution.

While commenting on the H1 2018 results of the company, Mr Dozie said, “At a macro level the Nigerian economy continued to record improvements because of stable, higher than anticipated oil prices.

“We have witnessed 15 months of expansion reflected in monthly PMI data, but investor sentiment has remained mixed caused in part by the election season factor.

“We have capitalised on the positive macro environment to sustain interest income in the short run with positive prospects for growth and have made progress in growing non-interest income.

“Importantly, we have continued to build awareness of Diamond Bank in the wider financial ecosystem to develop new frontiers in retail banking.

“Amongst this activity were the Beauty Souk and TechFest events, targeted at entrepreneurs and emerging businesses in the fashion and technology sectors respectively.

“Our partnership with Lagos Business School’s Enterprise Development Center to support young entrepreneurs continued with the seventh season of the Building Entrepreneurs Today program.

“In addition to retail banking, we are investing more resources in our mid-market business banking services to seize the opportunities emerging in that segment. In the second half of 2018, these investments will lead to improved profitability overall.

“Despite a tough six months being reported, the outlook for 2018 remains bright for the bank as we continue to focus on a return to strong profitability and improvement in other KPIs.”

Business Post reports that Diamond Bank shares lost 14 kobo or 10 percent on Tuesday to settle at N1.26k per share.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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Banking

Polaris Bank in Safe Hands, No Need to Panic—Management

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Polaris Bank Rewards Customers

By Aduragbemi Omiyale

The management of Polaris Bank Limited has urged its customers and members of the public not to panic over reports that the financial institution has been sold to a new investor, Mr Auwal Gombe, in the sum of N40 billion.

It was recently reported that efforts are being made to hand over the lender to the businessman, who is said to be an ally of former military president, Mr Ibrahim Babangida, after the Central Bank of Nigeria (CBN) nationalised the defunct Skye Bank Plc into Polaris Bank in 2018.

In a statement issued on Friday in Lagos, the bank described the report of the purported sale as not only “speculative” but done to deliberately “create panic” among its customers and the banking community.

The company said the CBN established it and injected funds for its operations, it has bounced back to profitability, with a solid balance sheet, saying there is no cause for alarm as the bank was in safe hands.

“Stakeholders may recall the regulatory intervention in the erstwhile Skye Bank by the CBN and the subsequent injection of capital via the Asset Management Corporation of Nigeria (AMCON) through a bridge bank process, which birthed Polaris Bank in 2018.

“The bank has since stabilised its operations following the intervention; improving its balance sheet, customer base and profitability,” a part of the notice today said.

Continuing, Polaris Bank noted that, “Whilst the intention has always been to return the bank to private ownership, such a sale would occur following regulatory approvals with formal notification to all relevant stakeholders,” expressing its commitment to “ensuring timely communication to the public in such an event.”

 “The board and management hereby reassure its customers, staff and the general public that Polaris Bank remains a stable, strong and credible financial institution, positioned to deliver sustainable value to all its stakeholders,” the statement concluded.

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Banking

Wema Bank Refutes Dud Cheque, Forgery Allegations

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wema-bank-logo

By Aduragbemi Omiyale

The management of Wema Bank Plc has rubbished an allegation that it issued a dud cheque in connection with a garnishee proceeding for the payment of a judgement debt on behalf of the Bayelsa State Government.

A legal practitioner, Mr George Haliday, had accused the financial institution of issuing dud cheques but in a statement issued on Wednesday, the lender explained that the cheques have only not been cleared for payment because of the subsisting appeal at the Court of Appeal sitting in Abuja on the garnishee proceeding which has now been decided in its favour.

According to the statement, the lawyer only ran to the Magistrate Court in Abuja to lodge a complaint about the issuance of dud cheques after he lost his case at the appellate court.

“It is very worthy of note that the judgement debt against Bayelsa State Government, which Barrister George Haliday attempted to enforce by a garnishee proceeding, thereby leading to the issuance of the cheques in question had been settled by Bayelsa State Government via a Terms of Settlement between Barrister George Haliday and the Bayelsa State Government at the Supreme Court,” a part of the statement.

Recently, there were reports that the Managing Director/CEO of Wema Bank, Mr Ademola Adebise, was issued an arrest warrant, but the bank dismissed this, saying its leader was not given a fair hearing in the matter.

“Wema Bank wishes to state that the warrant for the arrest of Mr Ademola Adebise is in violation of his fundamental rights to fair hearing as he was never personally served with any process to appear before the magistrate court nor was he represented in court.

“We are a law-abiding corporate citizen; if there was any court summons properly served on the Managing Director for his appearance in court, he would have done so without fail.

“But in this case, there was no such service extended to him or any court processes personally served on him to appear in court until a warrant of arrest was issued in absentia. We view the arrest warrant as being an infringement on his fundamental rights,” the statement said.

Concluding, the lender emphatically refuted and dismissed “in their entirety, the allegations of dud cheque and forgery levelled against our bank and the Managing Director. We also dismiss the inappropriate issuance of a bench warrant on our Managing Director.

“We are already engaging in legitimate actions to seek redress and bring all the perpetrators of these unprofessional conducts and heinous criminal acts against our Managing Director and the bank to book.”

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Banking

Advans Nigeria Becomes Most Innovative Microfinance Bank

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Advans MFB

By Aduragbemi Omiyale

More big feathers have been added to the colourful cap of Advans La Fayette Microfinance Bank, cementing its leadership position in the small lending business in Nigeria.

Recently, in recognition of its customer-centric credentials and innovation in product development, service delivery and brand management, the financial institution was named the Best Microfinance Bank in Nigeria at the Financial Derivatives Awards 2022.

Also, the company emerged as the Most Innovative Microfinance Bank in Nigeria in the Global Brands Magazine and World Economic Magazine Awards 2022.

The Managing Director/CEO of Advans La Fayette Microfinance Bank, Mr Gaetan Debuchy, while reacting to the accolades bestowed on the firm, dedicated the awards to the working management and staff of the bank, promising that the bank would continue to break boundaries.

“We are excited to win these awards. It further validates our innovative approach to providing customer-centric, affordable and transparent financial services,” Mr Debuchy said.

Also, the Head of Marketing and Communication at Advans La Fayette Microfinance Bank, Mr Kayode Abraham, stated that, “Over the years, we have centred our business on customer needs and feedback, which has helped us develop financial solutions from scratch to completion. We are pleased to be recognised as the most innovative and best microfinance bank in Nigeria.”

Earlier in the year, Advans Nigeria upgraded its mobile banking app ‘Adspire’ to include users’ ability to request bank statements and control their daily transaction limit. Through the app, clients can receive notifications and share by referring their friends and loved ones.

The bank recently introduced a micro-health insurance product and an education loan to facilitate financial inclusion.

The health insurance product was designed to ensure existing and prospective clients have access to high-quality and affordable health care services, while the education loan was designed to provide working and investment capital for school owners and to assist parents in paying their children’s school fees with ease.

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