Diamond Trust Bank’s (DTB) net profit for the year that ended on 31st December 2020 dipped by 51% to KSh3.5 billion, from KSh7.3 billion in 2019. According to the lender, higher loan loss provisions due to the elevated credit risk led to the steep decline in the full-year net profit.
“The pandemic has had a detrimental effect on lives and livelihoods across the globe and, as with other players in the industry, DTB has had to navigate through the resulting very challenging business environment, fraught with significantly elevated credit risk, by taking a prudent and significantly ramping up provisions,” said Nasim Devji, DTB Chief Executive Officer.
The bank’s net interest income, its largest revenue stream, decreased by 3.4% to KSh18.1 billion compared to KSh18.7 billion in 2019. However, non-interest income increased to KSh6.1 billion from KSh5.8 billion a year ago, mainly driven by an increase in foreign exchange trading income and higher income from fees and commissions on loans and advances.
In the last year, Diamond Trust Bank restructured more than 45% of its loan portfolio amounting to KSh101 billion, as its borrowers faced cash-flow constraints caused by the pandemic.
The regional lender’s loan book grew to KSh209 billion from KSh199 billion and customer deposits increased to KSh298 billion from KSh280 billion in 2019.
DTB posted a 43% jump in non-performing loans to KSh22.8 billion at the end of 2020, compared to KSh15.9 billion non-performing loans in 2019. Its provisions for loan loss increased dramatically to KSh7.3 billion in 2020, from KSh1.3 billion a year earlier.
The bank’s board of directors resolved to not propose any dividend for the financial year 2020.