Diamond Bank’s half year profit increased 9.03 percent on reduced tax, according to the lender’s financial statement.
For the six months through June 2014, the bank’s net income increased by 9.03 percent to N13.78 billion from N12.64 billion last year, helped by a 53.5 percent decrease in income tax expense.
Despite the regulatory increase in the cash reserve ratio (CRR) on public sector, the bank was able to increase interest income by 12.21 percent to N78.21 billion in 2014, compared with N70.05 billion in 2013.
As a result of a 23.79 percent surge in operating expenses in the period under review, profit before tax (PBT) were down by 8.47 percent to N16.07 billion in HY 2014, compared with N17.56 billion last year.
Cost-to-income ratio jumped to 64.47 percent in HY 2014, compared with 59.17 billion last year buoyed by surging operating expenses.
The bank has also concluded arrangement to raise capital to support expansion and refurbishment of business location with a right issue of N50.37 billion.
An investor that holds 14,475 existing shares has the opportunity to buy up 8,685 shares at a discount price of N5.80, for three new ordinary shares of five held.
The value of shares bought up would be up to N50, 371.Additionally, the value of the share price immediately after the right issue will reduce to N6.14 (the ex- right price based on dilution of existing shares) from N6.35, which was the prevailing market price last Friday on the floor of the exchange.
The gain on the right issue to investors will be worth 34k per share; this represents an increase to N6.14 from N5.80 right price.
So, selling these rights will create a capital gain to investors.
Risk assets and assets creation improved as loans to deposits rose by 9.69 percent to N755.95 billion in HY 2014 from N689.16 billion as HY 2013 as the bank seeks high interest earning assets with the goal of remaining profitable amid challenging environment.
