Diamond Bank issues profit warning

Diamond Bank issues profit warning

Friday, March 11, 2016 3:52 pm

A Diamond bank branch

A Diamond bank branch

For shareholders of Nigeria’s Diamond Bank, it was grim news from the Nigerian Stock Exchange, as the bank issued a profit warning that it’s profits for 2015 will be lower than in 2014.

It’s the third Nigerian bank, after FCMB and First Bank Holdings, to have done so in the past weeks and like others, it blamed the downturn in the economy.

The bank’s head of investor relations, Ifeatu Onwuasoanya notified the exchange about the state of the company, in a statement published today.

“The continuing deterioration in Nigeria’s macro-economic conditions has resulted in Diamond Bank Plc (Bloomberg: DIAMONDBNK) recognising higher than expected impairment charges on loans made to the Energy and Commercial Business

In light of these deteriorating conditions, and subsequent review of Diamond Bank Plc’s management accounts for the financial year ended December 31, 2015, preliminary indications are that earnings will be lower than in 2014. Detailed financial statements for the
year ended December 31, 2015 are expected to be released on or before March 31, 2016.

Diamond Bank wishes to reiterate that in recent years it has deployed considerable resources in building a dependable risk management framework, and the quality of its loan portfolio in general, remains high.

Mitigating action

The Bank remains determined to deliver on its stated strategy of creating Nigeria’s leading technology-led retail bank. Already, in 2016 the business has made significant changes to its operating structure that will result in reductions in operating costs. Further investment has been made to improve customer relationships and revenue in our core business segments.

These actions aim to deliver improved earnings and lower operating costs from 2016 onward.

Overall, despite the headwinds and the fact that 2016 presents a tough operating environment for the industry, we remain optimistic on the fundamentals underpinning our long term retail-led business strategy.

The bank’s stock closed the day at 152 kobo, from the previous day level of 155 kobo.This is a third of its 52 week high on the exchange.

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