EUR 48.04 For Business Accounts Only

Diamond Bank PLC - Earnings beat estimates, albeit down y/y

DIAMONDBNK released Q1’16 results, reporting a much improved performance across the key line items. Despite the 12% y/y decline in Interest Income, Gross Earnings was up 2% y/y (13% ahead of our estimate), supported by an impressive 39% y/y rise in Non-Interest Income. Similarly, we highlight the decent improvement in funding cost (in line with the trend observed in FY’15) as Interest Expense moderated 10% y/y and 5% from Q4’15 (11% better than our estimate). Although Net Interest Income (N25.3 billion) came in 12% weaker y/y, it was 6% ahead of our N23.9 billion estimate. In line with FY’15 trend, Operating Expense moderated marginally to N23.9 billion albeit up 3% from Q4’15. Consequently, PBT declined 20% y/y to N6.7 billion, better than our N1.8 billion estimate. With an effective tax rate of 14% vs. Vetiva estimate of 20%, PAT declined 20% y/y to N5.8 billion – significantly ahead of our N1.5 billion forecast.