(Nairobi) – Diamond Trust Bank (DTB) has reported an 8.4% increase in net profit for the nine months ending September 2024, reaching KSh 6.5 billion (approximately USD 45.1 million), bolstered by strong income from loans and other banking services.
The banking group’s net profit rose from KSh 5.9 billion in the same period last year, driven primarily by a 15.5% growth in total interest income, which reached KSh 44.5 billion (approximately USD 312 million). The increase in interest income was supported by higher loan rates, which benefitted from the Central Bank of Kenya’s (CBK) recent interest rate hikes. However, this was partly offset by a reduction in the loan book, which shrank by 4.8% to KSh 275 billion (USD 1.9 billion) from KSh 289.1 billion (USD 2 billion) the previous year. Despite this, DTB’s loan book had improved from a lower figure of KSh 267.8 billion (USD 1.8 billion) in June 2024.
The rise in income from loans was also helped by DTB’s investment in government debt securities, which grew by KSh 567.2 million (USD 3.9 million) to KSh 129.5 billion (USD 904 million). The income from these fixed-income securities, including Treasury bills, rose significantly due to CBK’s efforts to manage inflation and stabilize the shilling.
DTB’s non-interest income also contributed to the overall profit growth, increasing by KSh 521.2 million (USD 3.6 million) to KSh 9.7 billion (USD 67.8 million).
However, the bank’s interest expenses rose sharply by 25.8% to KSh 23.2 billion (USD 161 million), despite a reduction in deposits, which fell by KSh 15.8 billion (USD 109 million) to KSh 441.8 billion (USD 3.1 billion). This increase in interest expenses reflects the higher rates paid on deposit accounts, which were adjusted to keep pace with rising returns on competing assets such as Treasury bills.
DTB’s operating expenses increased slightly by 1.9%, reaching KSh 21 billion (USD 145 million), partly due to a reduction in provisions for bad debts. The bank lowered its loan loss provisions by KSh 736.6 million (USD 5 million) to KSh 5.2 billion (USD 36.1 million), even as the stock of defaults grew to KSh 39.1 billion (USD 269 million) from KSh 38.7 billion (USD 267 million).
DTB’s regional subsidiaries in Tanzania, Uganda, and Burundi accounted for about 30% of the group’s profit during the review period.
In a strategic move, the bank recently restructured its management, creating a separate managing director position for its Kenya unit. This change allows Group CEO Nasim Devji to focus on overseeing regional operations and leading the bank’s expansion across East Africa. Murali Natarajan, appointed as Managing Director of DTB Kenya earlier this month, will lead the bank’s growth in its home market.
Looking ahead, DTB plans to expand its presence in the retail banking sector, alongside its core focus on small and medium-sized businesses.