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A few more banks have released their 2010 year end results, some
of which have fallen below the expectation of industry watchers.
Diamond Bank on Tuesday posted a profit-before-tax of N4.227
billion from a loss of N12.4 billion in 2009, while profit after tax rose to
N1.33 billion from a loss of N8.17 billion in 2009.
However, gross earnings were down 16 per cent to N91 billion for
the 12 months period ended 31 December, 2010 (from N108 billion, 12 month
period ended 31 Dec 2009). Net interest income was also down 16 per cent to
N49.0 billion (from N42.2 billion in 2009).
The bank’s total assets down 9 per cent to N594.8billion (from
N650.4 billion in 2009), total loans to customers down 5 per cent to N312.2
billion (from N329.8 billion in 2009), while customer deposits were down by 15
per cent N412.0 billion (from N482.0 billion in 2009).
‘Nightmarish’ performance
Some finance experts have, however, expressed their
disappointment at the bank’s figures, saying it is “much worse than expected”.
“This result pales substantially when stacked against our
forecasts. Although gross earnings were 7.7 per cent ahead of our forecast of
N84.5 billion, both profit before tax (PBT) and profit after tax (PAT)
overwhelmingly under performed our forecasts of N10.2 billion and N7.1 billion
by 53.3 per cent and 81.2 per cent respectively. We are constrained to call
this a really poor bottom line performance. The bank, expectably, did not
propose any corporate actions in the wake of what is a nightmarish
performance,” Afrinvest, a finance firm, said.
Industry watchers say the bank may have had to take a
substantially larger impairment in the form of provision for bad loans, given
the really poor margins on display as they do not expect such a ‘massive’
deterioration in operating margins.
The bank declined speaking on the figures when contacted by our
reporter, saying its reaction would be based on a statement it issued on
Tuesday.
In the statement, Uzoma Dozie, ED Corporate Banking, Diamond
Bank, said: “In compliance with our enhanced risk management policies, the
Corporate Banking unit continued to unwind positions carried over from the economic
slowdown in 2009. This has enhanced liquidity and reduced NPLs. Provisions are
starting to come back to normal levels as the economy returns to its pre-2008
growth path. This bodes well for the unit as we take up new opportunities
arising from telecoms and government infrastructure spending in 2011.”
In a similar industry move, First City Monument Bank said
yesterday its pre-tax profit rose to N9.02 billion in 2010 from N856.6 million
the previous year, and declared a N0.35 dividend per share while gross earnings
rose to N62.67 billion from 35.79 billion naira in 2009, according to a Reuters
report.
Stanbic IBTC’s gross earnings in its 2010 year end reports
declined by 5.1 per cent (from N59.8 billion to N56.7 billion), while PBT and
PAT grew by 30.8 per cent (from N10.3 billion to N13.5 billion) and 16.2 per
cent (from N8.1billion to N9.5 billion) respectively, when measured against the
corresponding period in 2009.
Afrinvest says the bank’s gross earnings decline could be
attributed to its aggressive growth play on the Nigerian market that may have
seen it give up some yield on interest bearing assets.
