Diamond Trust Bank Kenya Limited (DTB) has posted Kes 4.5 billion in group pre-tax profit for the first six months of 2020, marking a 25% decline from the previous year.
The reduced profit was largely the result of increased provisions, reflecting the prudent approach adopted by DTB in the midst of the prevailing higher credit risk environment following the COVID-19 pandemic.
DTB Group CEO and Managing Director Nasim Devji said: “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.”
“Our focus right now is to cater to the needs of our customers as they seek ways to keep their businesses operational until the situation improves. We also continue with efforts to protect our staff and other stakeholders and look forward to the business environment improving,” Ms Devji added.
The Bank’s total operating income increased by 2% to Kes12.4 billion in the period compared to Kes12.2 billion in June 2019. The non-funded income grew by 6% to KSh3.2 billion from KSh2.9 billion.
During this period, DTB’s non-branch transactions rose significantly to 87% up from 81% on a yearon-year comparison. This change was on account of the increased adoption of mobile and internet banking by the Bank’s customers.
Total Assets grew by 3% to KSh388.3 billion, funded by customer deposits and existing business growth. Net loans and advances grew 6% to close the period at KSh201.5 billion.
Shareholders’ equity grew 7% from Kes56.9 billion to Kes61.0 billion. This was driven by the growth in retained earnings over the 12-month period to June 2020.
The Group has strong capital and liquidity buffers which speaks to the Group’s inherent resilience. The Group’s core capital as a proportion of total risk weighted assets closed the period at 18.1% against the Central Bank of Kenya statutory minimum of 10.5%. Total capital to risk-weighted assets stood at 20.0% against a regulatory minimum of 14.5%. All banking subsidiaries met regulatory capital requirement.
DTB has rolled out a number of interventions to cushion customers and the wider community against the effects of the pandemic.
The interventions include: the restructuring of loans, expansion of credit lines, and the extension of loan tenures to enable the businesses remain operational. DTB has also waived fees associated with loan restructuring and those for mobile transactions.
The Bank restructured loans amounting to Kes64 billion since the outbreak of the pandemic. The restructured facilities represent 42% of DTB’s loan book. In this respect, earlier this month, the Bank and the International Finance Corporation announced a financing agreement of US$ 50 million which the Bank will use towards funding its distressed borrowers following the COVID-19 pandemic.
DTB committed Kes100 million towards COVID-19 relief efforts. Of this, Kes50 million was handed over to the COVID-19 Emergency Response Fund. More than Kes14 million has gone towards the distribution of food to over 6,000 vulnerable families across the country, Kes5 million to feeding frontline workers at Kenyatta National and Mbagathi hospitals in partnership with Serena Hotels, and KSh5 million for the construction of a field hospital at Aga Khan University Nairobi.
Funds have also gone towards the construction of boreholes and water springs in Mombasa and Migori Counties, enabling children with special needs to continue learning, and procuring a digital solution to enable effective contact tracing and data management in Kisii County.
“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.
