By FRANK OYAKHILOME
THE continuing deterioration in Nigeria’s macro-economic conditions has resulted in Diamond Bank Plc (Bloomberg: DIAMOND BANK) recognising higher than expected impairment charges on loans made to the Energy and Commercial Business sectors thus causing the bank to notified the Nigerian Stock Exchange (NSE) and investors that its expected earnings for the financial year ended Dec. 31, 2015 would be below 2014 in a recent profit guidance statement by the company to the exchange and the London Stock Exchange.
The statement stated that the preliminary indications showed that 2015 earnings would be lower than in 2014,emphazing that the continued deterioration in the nation’s macro-economic condition resulted to higher than expected impairment charges on loans made to the energy and commercial business sectors.
The statement stated that the detailed financial statements for 2015 would be released on or before March 31, 2016 as it will reveal that the deteriorating conditions and subsequent review of the bank’s management accounts for the financial year ended Dec. 31, 2015, shows that the preliminary indications are that earnings will be lower than in 2014.
It added that the bank had deployed considerable resources in building a dependable risk management framework and explained that the quality of its loan portfolio in general remained very high. However the bank remains determined to deliver on its stated strategy of creating Nigeria’s leading technology-led retail bank, the statement stated.
The statement further reveals that the bank had made significant changes in its operating structure aimed at reducing operational cost, as further investment has been made to improve customer relationships and revenue in its core business segments.
“These actions aim to deliver improved earnings and lower operating costs from 2016 onward” the statement noted ,adding that despite the challenges and for the fact that 2016 presents a tough operating environment for the industry, the statement affirms that the bank remain optimistic on the fundamentals underpinning her long-term retail-led business strategy.