The report showed that the Bank’s retail strategy is quite rewarding as the bank recorded a landmark figure in the value of funds disbursement of over N1 billion to small business owners under the cash flow-based SME lending scheme in partnership with the Women’s World Banking (WWB), and this has earned the leading financial institution ranked among the first five SME customer bank in Nigeria in the KPMG customer service survey 2018.
Despite the challenging trading environment, the bank’s Contribution of non-interest income to profit increased by 10.81% from N24.66 billion (Q3 2017) to N27.32 billion (Q3 2018) while Impairment charges down 24.21% from N33.21 billion (Q3 2017) to N25.17 billion (Q3 2018). Interest expense up 18.32% to N41.26 billion year-on-year, but it has continued to decline in-line with guidance, falling by 15.36% from N14.83 billion (Q1 2018) to N12.56 billion (Q3 2018) and 2.89% year-on-year increase in operating expense to N66.20 billion (Q3 2018). However, cost containment measures are underway with the digitization process contributing to quarter-on-quarter gains with OPEX declining 0.36% from N22.07 billion (Q2 2018) to N22.15 billion (Q3 2018).
Customer deposit dropped by 8.0% year-on year to N1,107 billion due to re-pricing and non-rollover of high priced maturing deposits, and migration to government securities while Liquidity position remains strong as current and savings account balances increased from 77.4% (FY2017) to 78.08% of total deposits in September 2018.
The bank’s retail and digital strategy has continued the expansion of financial inclusion programme with total number of banking agents rising to 70,052 (Q3 2018) across Diamond Y’ello, BETA and CLOSA product lines. Apart from the disbursed N1 billion to Small and Medium Enterprises (SMEs), in partnership with Women’s World Banking as of September 30, 2018, the bank also Introduced SMEzone to the market – an information-sharing platform, aimed at positioning entrepreneurs for competitiveness while the sale of its UK subsidiary expected to be completed by year-end.
Commenting on the business, Chief Executive Officer, Mr. Uzoma Dozie said: “The global economy is currently witnessing a shift in trade relations alongside continued interest rate adjustments. This has led to greater volatility across markets and increasingly fragile economies. Nigeria’s economy has not been immune to certain headwinds, so that while the economy recorded quarters of expansion, the rate of growth has weakened. However, against this backdrop, our digital-led retail strategy has remained robust. Through this strategy we have been able to continue scaling up by reaching a wide pool of customers both cost effectively and efficiently. As a result of our network and digital infrastructure, during Q3 we reached the N1 billion mark in total loans disbursed to Small and Medium Enterprises (SMEs). Alongside this, we introduced the SMEzone, a platform targeted at keeping entrepreneurs well positioned for competitiveness through community and continuous learning. We are investing more in businesses in the middle market because we see entrepreneurs as a key driving force for economic growth. This focus is in line with and supportive of our own recovery and return to profitability.
As we move into the final quarter of the year, we expect headwinds to continue driven by emerging situations in developed economies as well as our domestic political realities. Despite this, our investors can expect a further decline in Non-Performing Loans (NPLs), a further increase in our digital footprint and completion of the sale of the UK subsidiary. Through these actions we remain optimistic about the medium to long term outlook of Diamond Bank and its return to strong profitability.”