DTB profit up 11.5pc on growth of regional operations

Diamond Trust Bank (DTB) recorded an 11.5 per cent growth in after tax profit for the nine months ended September, boosted by regional operations.

The listed lender’s net profit stood at Sh4.7 billion in the period compared to Sh4.2 billion posted a year earlier.

Subsidiary operations contributed Sh1.3 billion to the bank’s bottom-line, up from Sh1 billion in September 2014.

This saw their share of the overall profit rise to 28.4 per cent from 25.4 per cent. “Our subsidiaries have shown strong performance with an increase in market share in the different countries,” said the bank’s head of finance and planning, Alkarim Jiwa.

DTB has regional operations in Tanzania, Uganda and Burundi. The bank has been deepening its presence in regional markets with an aim of growing its branch network to over 120 by year end.

In Kenya, the bank intends to grow its network to 56 branches from the current 51, and 39 branches in Uganda from 33. It operates 22 outlets in Tanzania and four in Burundi.

“Of the listed banks, DTB’s regional diversity in terms of income contribution stands out,” noted Standard Investment Bank.

The lender, majority owned by the Aga Khan Fund for Economic Development (AKFED), has said it is targeting to open operations in the Democratic Republic of Congo, Madagascar and Rwanda.

READ: DTB profit hits Sh5.7 billion on growth from regional outlets

DTB’s loan book expanded by Sh46 billion to Sh172 billion representing a 21.2 per cent increase in interest income to Sh18.3 billion.

Its deposit base increased by Sh26 billion to Sh175 billion. Interest expenses grew at a faster pace, 29.3 per cent, underlining the recent rise in the cost of funds.

The mid-tier lender however took a hit from the high interest rates with its bad loan book growing by Sh400 million in the three months to September to Sh2.7 billion.

This forced the bank to double its loan loss provision during the period to Sh1.3 billion, affecting its bottom-line.

The bank’s debt position increased by Sh5 billion in the three months to September, pushing its borrowed funds to Sh24.6 billion and exposing it to higher financing costs.

Mr Jiwa attributed the debt increase to the uptake of short term loans for financing its trade finance business.

DTB announced the resignation of Zakir Mahmood, a Pakistani, from its board of directors having served for two and a-half years.

“Mr Mahmood informed the board that his decision to resign was due to his extensive professional and personal commitments overseas,” said company secretary Stephen Kodumbe in a notice.

Mr Mahmood is a director of Pakistan based, Habib Bank, having served previously as its chief executive officer. Habib Bank owns 11.97 per cent of DTB.

DTB’s share prices slipped to Sh195 per unit on Friday down from Sh200 in the previous day trading.