DIAMOND TRUST BANK 9 MONTH PROFIT BEFORE TAX UP 13% TO 3.1 BILLION

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Today morning Diamond Trust Bank Kenya Group (DTBK) announced its financial results for the 9 month period ended September 30^th 2011

Profit Before Tax rose by 13.1% to hit Kshs. 2.1 Billion. Profit After Tax was up 10.4% to Kshs. 1.95 Billion

Subsidiaries in Uganda, Tanzania and Burundi contributed Kshs. 264 Million to the Profit After Tax, 13.6% of the total profit. At half year, the contribution was 12%

Cost:Income ratio was down to 53.6% from 52.82%

2010 vs. 2011 Analysis

	2010  Kshs.	2011  Kshs.	% CHANGE
TOTAL ASSETS	80.2 BILLION	107.2 BILLION	+33.6%
NET LOANS AND ADVANCES	50.1 BILLION	74.6 BILLION	+49.1%
CUSTOMER DEPOSITS	62.5 BILLION	85.9 BILLION	+37.3%
LOAN:DEPOSIT RATIO	80.07%	86.95%	+6.9%
TOTAL INTEREST INCOME	5.44 BILLION	6.7 BILLION	+23.1%
TOTAL INTEREST EXPENSE	2 BILLION	2.02 BILLION	+1.4%
NET INTEREST INCOME	3.45 BILLION	4.68 BILLION	+35.6%
TOTAL OPERATING INCOME	5.83 BILLION	6.7 BILLION	+14.9%
TOTAL OPERATING EXPENSE	3.1 BILLION	3.6 BILLION	+16.5%
COST:INCOME RATIO	52.82%	53.57%	+0.7%
PROFIT BEFORE TAX	2.75 BILLION	3.11 BILLION	+13.1%
PROFIT AFTER TAX	1.77 BILLION	1.95 BILLION	+10.4%

Total Assets increased by Kshs. 37 Billion to Kshs. 107.2 Billion

Customer Deposits was up 37.3% to Kshs. 85.9 Billion

The increased deposit base allowed DTBK to advance more loans to customers. Indeed, Net

Loans and Advances surged 49.1% to Kshs. 74.65 Billion

Total Interest Income was up 23.1% to Kshs. 6.7 Billion, helped by a 28.3% rise in interest from Loans and Advances to Kshs. 5.95 Billion. Interest from Government Securities slipped 20.4% to Kshs. 561 Million

Loan Loss Provision decreased by 25% to Kshs. 366 Million

Non Interest Income went down 15% to Kshs. 2 Billion as ‘Other Income’ fell by 81% to Kshs. 200 Million.

Fees and Commissions were up 41.8% to Kshs. 1.11 Billion

Foreign Exchange Trading Income registered a 30.8% growth amid the recent volatility of the Kenya Shilling to Kshs. 707 Million

Staff Costs increased by Kshs. 243 Million to Kshs. 1.43 Billion

Gross Non Performing Loans increased to Kshs. 915 Million from Kshs. 820 Million as a result of the increase in Net Loans.

The quality of the loan book (GNPL/Net Loans) still improved to 1.23% from 1.64%.

Net Non Performing Loans was up by 19.3% to Kshs. 108 Million

Q2 2011 vs. Q3 2011 (Quarter on Quarter Analysis)

	Q2 2011          Kshs.	Q3 2011          Kshs.	% CHANGE
TOTAL INTEREST INCOME	2.2 BILLION	2.6 BILLION	+16.5%
TOTAL INTEREST EXPENSE	619.3 MILLION	838.6 MILLION	+35.4%
NET INTEREST INCOME	1.58 BILLION	1.73 BILLION	+9.1%
TOTAL OPERATING INCOME	2.2 BILLION	2.47 BILLION	+12.4%
TOTAL OPERATING EXPENSE	1.02 BILLION	1.41 BILLION	+38.7%
COST:INCOME RATIO	46.4%	57.3%	+10.9%
PROFIT BEFORE TAX	1.18 BILLION	1.05 BILLION	-10.4%
PROFIT AFTER TAX	818 MILLION	612 MILLION	-25.2%

A glance at the Quarter on Quarter analysis reveals Q3 was definitely tougher than Q2 for DTBK

Operating Expenses rose by 38.7% in the Quarter

Cost:Income ratio for the 3^rd Quarter alone stood at 57.31%, 10.9% higher than Q2 2011 which had a Cost:Income ratio of 46.44%

It thus follows that Profits for the 3^rd Quarter were lower than Q2 Profits

Following the results, DTBK is trading at Price Earnings ratio of 7.37

BARCLAYS BANK OF KENYA 9 MONTH AFTER TAX PROFIT UP 11.2% TO 6.1 BILLION

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Barclays Bank of Kenya (BBK) announced its financial results for the 9 months ended September 30^th 2011

Profit Before Tax rose by 26.4% to stand at Kshs. 8.9 Billion. Profit After Tax, though, was up 11.2%, at Kshs. 6.1 Billion

The profit growth was guided by a significant reduction in staff costs and a reduction in the loan loss provision

Gross Non-Performing Loans (GNPL) were down 9.8 percent resulting in GNPL/Net Loans improving by 1.1% to 5.76%

The significant reduction in expenses led in the Cost:Income ratio reducing to 54.65%, from 64.46%

During the period, BBK managed to recover previously impaired loans   

2010 vs. 2011 Analysis

	2010  Kshs.	2011  Kshs.	% CHANGE
TOTAL ASSETS	177.1 BILLION	180.9 BILLION	+2.1%
NET LOANS AND ADVANCES	91.7   BILLION	98.9 BILLION	+7.9%
CUSTOMER DEPOSITS	127.7 BILLION	135.8 BILLION	+6.3%
LOAN:DEPOSIT RATIO	71.78%	72.82%	+1.0%
TOTAL INTEREST INCOME	13.3 BILLION	12.7 BILLION	-4.3%
TOTAL INTEREST EXPENSE	1.22 BILLION	732 MILLION	-40%
NET INTEREST INCOME	12.1 BILLION	12 BILLION	-0.7%
TOTAL OPERATING INCOME	19.7 BILLION	19.6 BILLION	-0.9%
TOTAL OPERATING EXPENSE	12.7 BILLION	10.7 BILLION	-16%
COST:INCOME RATIO	64.46%	54.65%	-9.8%
PROFIT BEFORE TAX	7 BILLION	8.9 BILLION	+26.4%
PROFIT AFTER TAX	5.5 BILLION	6.1 BILLION	+11.2%

Total Assets grew by 2.1% to Kshs. 180.9 Billion, which is less than the 5.3% which the entire industry grew by in the 9 months to September

Net Loans were up 7.9% to Kshs. 98.9 Billion

The Bank managed to ramp up its profits in the period in no small part to the reduction in their expenses, as Total Interest Income and Total Operating Income were both down

Interest from Loans and Advances as well as Interest from Government Securities was down.

Meanwhile Interest Expenses on Customers Deposits was more than halved to Kshs. 433 Million, from 914 Million

Loan loss provision reduced by 55.7% to Kshs. 520 Million from Kshs. 1.2 Billion

Fees and Commissions declined by 7.2% to Kshs. 5.2 Billion

Foreign Exchange Trading Income was up 16.1% to Kshs. 2.1 Billion

Barclays’ decision to lay off managers at the beginning of the year led to Staff Costs decreasing by 15.1% or almost Kshs. 1 Billion

Liquidity was at a solid 47.6%, a 27.6% excess on the Minimum Statutory Ratio

Q2 2011 vs. Q3 2011 (Quarter on Quarter Analysis)

	Q2 2011          Kshs.	Q3 2011          Kshs.	% CHANGE
TOTAL INTEREST INCOME	4.0 BILLION	4.9 BILLION	+24%
TOTAL INTEREST EXPENSE	232.5 MILLION	319 MILLION	+37%
NET INTEREST INCOME	3.71 BILLION	4.57 BILLION	+23.2%
TOTAL OPERATING INCOME	6.3 BILLION	7.1 BILLION	+12.4%
TOTAL OPERATING EXPENSE	3.34 BILLION	3.55 BILLION	+6.0%
COST:INCOME RATIO	53.2%	50.2%	-3.0%
PROFIT BEFORE TAX	2.94 BILLION	3.52 BILLION	+19.7%
PROFIT AFTER TAX	2.11 BILLION	2.47 BILLION	+16.9%

BBK saw a positive Q3 2011 in comparison to Q2 2011

It is however interesting to note the 37% rise in Total Interest Expense for the corresponding quarters which is will likely be replicated in the next couple  of quarters

The release of the results came hot on the heels of the decision by the Central Bank of Kenya Monetary Policy Committee to raise the Central Bank Rate by 550 basis points to 16.5% in its attempt to try to rein in inflation

This will make the rest of the year a tough period for Kenyan banks to find new lending opportunities. Economic growth is expected to cool


Barclays closed Wednesday trading down 4.62% to 14.45/=. The share though rallied 38.5% in the month of October, only being bested by Williamson Tea which rose 62% in the same month. Barclays is trading at a Price to Earnings ratio of 7.5.