Nasim Devji, the Group CEO of Diamond Trust Bank (DTB), speaking during a past event at DTB Sarit Centre Branch at Westlands in Nairobi on December 17, 2022.
DTB Group recorded an 8.4 percent rise in net profit to Sh6.5 billion in the nine months ended September, helped by higher income from loans and other banking services.
The banking multinational had made a net profit of Sh5.9 billion the year before. DTB’s total interest income increased 15.5 percent to Sh44.5 billion in a higher interest rate environment that compensated for a reduction in lending.
The loan book shrank 4.8 percent to Sh275 billion from Sh289.1 billion a year earlier, though it had jumped from a low of Sh267.8 billion in the quarter ended June 2024.
Banks have benefitted from higher interest rates on loans, following the Central Bank of Kenya’s (CBK) move to raise the benchmark Central Bank Rate (CBR) steadily to 13 percent earlier this year before reducing it to the current level of 12 percent.
DTB’s interest income was also supported by its investment in government debt securities which grew by Sh567.2 million to Sh129.5 billion.
The income from the fixed income securities –including Treasury bills— also rose significantly to high double digits, in response to CBK’s efforts to contain inflation and support the shilling.
DTB’s non-interest income increased by Sh521.2 million to Sh9.7 billion, contributing to the profit growth.
The bank’s interest expenses surged 25.8 percent to Sh23.2 billion despite deposits shrinking by Sh15.8 billion to Sh441.8 billion, indicating a jump in returns paid to savers.
The interest rate on fixed deposit accounts increased significantly, in response to rising returns on other competing assets including Treasury bills.
DTB’s operating expenses rose by a marginal 1.9 percent to Sh21 billion, helped a reduction in loan loss provision.
The bank cut its provision for bad debt by Sh736.6 million to Sh5.2 billion despite the stock of defaults increasing to Sh39.1 billion from Sh38.7 billion.
Regional subsidiaries contributed about 30 percent of the group’s profit in the review period.
DTB recently restructured its management, creating a separate managing director role for the Kenya banking unit in a move that leaves group CEO Nasim Devji to oversee all the subsidiaries and lead expansion in East Africa.
DTB has regional operations in Tanzania, Uganda and Burundi.
DTB Kenya is now led by Murali Natarajan who was appointed at the start of this month.
The banking multinational plans to expand rapidly in the retail banking space to add to its existing core client group of small and medium-sized businesses.
