By PETER EGWUATU

Diamond Bank Plc has recorded a Profit After Tax (PAT) of N8.2 billion for the first quarter of 2014, representing a  growth of 37 per cent Year on Year.

According to information from the Nigerian Stock Exchange, NSE, the Bank also recorded a profit before minority interest of N8.446 billion for the year under review, while interest income stood at N38,245 billion. Analyzing the Diamond Bank’s first quarter results, FBN Capital stated that the growth in PAT was driven by visible improvements in Diamond’s underlying results and a reduction in taxes.

According to its analysis “Both funding income and non-interest income posted healthy growth during the period. Diamond Funding income was up 12 per cent y/y to N27.5billion while non-interest income grew 65 per cent y/y to N10.0billion to support a 23 per cent y/y growth in PBT before provisions.”

Continuing, the FBN Capital stated “Loan growth of 3 per cent Quarter on Quarter, q/q in first quarter, Q1 was slightly ahead of the 2 per cent q/q deposit growth during the period. Similar to the fourth quarter, Q4 numbers, these results more than offset a 25 per cent y/y increase in  Operating Expenses ,opex and N5.0 billion in loan loss provisions (up 54 per cent y/y). Sequentially, PBT was up 42 per cent q/q because funding income growth of 7 per cent q/q and a 24 per cent q/q decline in provisions were enough to offset a decline of 11 per cent q/q in non-interest income.

“ However a N2.0bn tax gain in Q4 2013 and to a lesser extent N250million  loss on the other income line compared with N764million  in Q4 2013 resulted in PAT declining 11 per cent  q/q.

Compared with our unrevised estimates (prior to Q4 results being published), Diamond’s Q1 2013 results are better than we were expecting. Although funding income was close to our forecast of N28.5bn forecast, non-interest income came in ahead of our forecast by 48 per cent.