Diamond Trust Bank Kenya Ltd — Mon, February 08 2010 myStocks!

30-Aug-07: Rights Issue: 1 to 6

Diamond Trust Bank Kenya Limited is a Kenya-based company. The Company is engaged in the business of providing banking and other related services. The Company’s subsidiaries include Diamond Trust Bank Tanzania Limited, which operates in Tanzania, and Premier Savings and Finance Limited, which is dormant. It also conducts banking services in Tanzania and Uganda.

Nation Centre Kimathi Street P.O. Box 61711 Nairobi, Kenya +254-20-28490000 (Phone)
+254-20-2245495 (Fax)

Company website:
http://www.diamondtrust-bank.com
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Updated: Mon, December 22, 2008

Business Performance

Diamond Trust Bank is one of the up and coming small to medium sized banks seeking to achieve an increased market share through organic growth. Accordingly, the bank is still in the heavy investment phase in which most of its funds are directed towards branch expansion and technology acquisition initiatives. The bank, which has been historically mainly involved in corporate asset financing, is now increasingly looking to retail banking as the engine of future growth. To complement its efforts to diversify into the retail sector (as the bank's lending is still heavily concentrated in asset financing), the firm is currently seeking to expand both its branch and ATM network in all the three East African countries. Further diversification has been achieved by the Bank's Western Union money transfer services. As the up-market segment of the asset financing market is dominated by bigger banks, the bank may be better positioned to focus on the middle market segment as a source of continued growth. In this regard, it has raised supplementary capital through a 6-yr subordinate debt, from Jubilee Holdings; at 9.52% interest raises its costs of doing business in the medium-term. Further, the bank intends to raise its core capital (tier I capital) levels by way of a rights issue.

In the first half of 2006, the bank registered a 42% growth gross operating income to KES 1.09 Billion while operating income more than doubled to KES 286.00 Million. Earnings also doubled to KES 212.00 Million. Customer deposits and loans & advances rose by 40% and 28% to KES 15.00 Billion and KES 11.00 Billion respectively. Non-performing loans to total loans ratio improved from 2.6% the previous year to 1.6% in 2004. The firm's profitability appears to have been boosted by a 70% downward revision in the bad debt provision to KES 20.00 Million, which may not be sufficient compared to the present advances level of about KES 12.00 Billion and a total nonperforming loans ratio to total loans of about 1%.

Future Prospects

With the regional economic outlook being generally upbeat and the Kenyan interest rate regime stabilizing, the bank is well placed to continue on the path of improved performance through organic growth.