The restructuring of a huge chunk of its loan book pushed down the Net Earnings of listed Diamond Trust Bank (DTB) to KSh 2.6 Billion from KSh 4.1 Billion recorded at the end of H1, 2019.
The lender’s cash balances declined to KSh 6.9 Billion from KSh 7.2 Billion during the period under consideration.
Customer deposits, a key item on the balance sheet, also declined from KSh 283.1 Billion to KSh 280.4 Billion.
To cushion itself from possible loan defaulters, DTB increased its provisions for loan loss from KSh 5.4 Billion to KSh 6.2 Billion.
The lender’s pre-tax profit declined by 25% to KSh 4.5 Billion from KSh 5.9 Billion recorded in H1, 2019.
Gross non-performing loans increased from KSh 15.1 Billion to KSh 17.5 Billion with provisions resulting in net NPLs of KSh 8.6 Billion from KSh 7.5 Billion at the end of H1, 2019.
A statement of the lender’s comprehensive income indicates a decline in interest earned from lending to customers from KSh 9.9 Billion to KSh 9.6 Billion.
Total Interest Income fell from KSh 16.3 Billion to KSh 15.8 Billion, while Net Interest Income rose marginally to KSh 9.3 Billion from KSh 9.2 Billion.
Earnings Per Share(EPS) which measures profitability declined from KSh 13.89 to KSh 8.59 while the lender’s balance sheet size grew to KSh 388.3 Billion from KSh 375.9 Billion.
DTB joins the list of lenders whose half-year earnings have declined as a result of adverse effects of coronavirus on household incomes and activities of firms.
“Across the banking industry, we are operating in very tough times and share the hope that as a country, we will soon be out of this crisis. At DTB, most of our customers are in the Small and Medium Enterprises segment, and they are facing perhaps the toughest period they have ever gone through,” said Nasim Devji, DTB Group CEO and Managing Director.
DTB has rolled out several interventions to cushion customers against effects of the global pandemic including the restructuring of loans, expansion of credit lines and the extension of
loan tenures to enable the businesses to remain operational.
DTB has also waived fees associated with loan restructuring and those for mobile transactions.
The lender has restructured loans amounting to KSh64 billion since the outbreak of the pandemic. The
restructured facilities represent 42% of DTB’s loan book.
Earlier this month, DTB and the International Finance Corporation(IFC) announced a financing agreement of US$ 50 million which the lender will use towards funding its distressed borrowers following the COVID-19 pandemic.
“We remain optimistic that the pandemic will soon be over even as we remain steadfast in supporting our customers and delivering value to all our stakeholders,” said Ms Devji.
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