Vous êtes sur la page 1sur 31

ISSN 1597 - 8842 Vol. 1 No.


Dec 31, 2009 and Q1 2010 Results Review

Issued on May 17, 2010
Diamond Bank Result – Executive Summary 03

The Operating Environment 05

o The Financial Market in 2009 – Regulatory Reality

o The Expectations of Management in 2009 – A Review
o The Expectations of Management in 2010 – An Insight

Fundamental Analysis 11
o The Financials Reviewed
o Q1 2010 Snapshot & Salient Indices

Technical Analysis 25

The Analyst Insight 27

Appendix – Financial Summary 28

ISSN 1597 - 8842 Vol. 1 No. 35

© 2010 www.proshareng.com May 2010 2

1. Executive Summary
The Diamond Bank Plc 2009 December common year end results recently released in
compliance with the Central Bank of Nigeria uniform accounting year for banks in the
country has been reviewed and outcome of our objective analysis shows that the
bank’s performance appears weak comparatively.

Going by the Bank’s analyst presentation for the 2008/09 financial year released in
August 2009 (http://www.proshareng.com/reports/view.php?id=2617 - the bank stated
categorically that the loan loss provision of N24billion made in the books of the bank
following the CBN/NDIC joint audit exercise would be a one-off provision, a feature it
does not expect to occur again. However, in its 8-months results to December 31,
2009 – it posted a new loan loss provision in its common year end financials of
N24.745billion – a total of N48.745billion provision in its 20-months financials.

Besides the loan loss provisions’ impact on the profitability of the bank in the reporting
period under review, the trend of some income components when compared with the
expenses components contributed to the profitability decline experienced by the bank.
While some of the income components were on the decline, expenses continued to rise
– leading to deterioration in the financial efficiency of the bank.

Worthy of note in the analysis of the cost efficiency matrix of the bank is the fact that
despite a staff rationalisation exercise (revealed by reduction in the number of staff by
461 from 3,414 as at April 30th, 2009 to 2,913 by December 31st, 2009) - the cost per
staff ratio of the bank still remains relatively high closing at N21.567million as at
December 31st 2009 from N21.053million of December 31st 2008.

As at 31st March, 2010 (Q1 2010 financials), the cost had grown higher to N22.356
million – suggesting that the staff reduction exercise had little or no positive impact on
the cost structure of the company.

Diamond Bank Plc may need to carry out a review of some of the subsidiary
relationships it has to allow it prune out those that offer no medium term contribution
to group performance. The sustained unprofitable trend in some of the subsidiaries
may continue to be a burden on the profitability of others – which perhaps the CBN
ordered changes on the re-calibration of the universal banking system, affords it. The
continued negative contribution of Diamond Capital Ltd would suggest inkling as to
the level of exposure of the bank to the capital market. The bank’s management
suggested in its April 2009 presentation the closure of unprofitable subsidiaries, such is
yet to be executed as some of the subsidiaries represent a key component depleting
the profitability potential of the group.

Diamond Bank Plc posted a net loss of N8.142bn as against N5.144bn profit after tax
reported in its 2008/2009 year end audited results to April 30th, 2009. The bank in its
2010 first quarter to March 31st, 2010 has however moved into a profitability position
with N1.527bn Profit after tax reported (though below the preceding year comparable
period by 78.71%). Close observations of the bank’s account figures showed the
following factors as responsible for the current loss position recorded:

Heavy loan loss provisions to the tune of N24.745bn made in the eight months
accounting period compared with N24.623bn made in the preceding twelve months
accounting period.
Mismatch in the income and expenses components of the bank in the period.
Income and expenses were on the inverse relationship to the detriment of the
bank’s profitability. This was glaring in the efficiency ratio of the bank.

© 2010 www.proshareng.com May 2010 3

The impact of CBN intervention/shake-up in the banking sector last year which
caused a lot of disruptions in the banking sector/business, and a drag on the bank’s
loan book ( this was not peculiar to the bank alone as all the banks were affected)
The negative performance of some of the subsidiaries and business segment of the
bank which must now be confronted squarely.

Though the bank made a swing to profitability in its Q1 2010 results, percentage
variances of all the figures in the income statement regiment were not particularly
encouraging, though understandable - as all the figures closed below the figures
recorded in the preceding year comparable period. The only two positive
variances recorded were in the operating expenses and loan loss provisions items - a
burden to profitability. This consequently led to a decline in some of the key
performance ratios in the first quarter - a repeat of some of the common year end
results key ratios. For instance EPS closed lower at 10k from 50k of the
preceding year comparable period.

Like most banks that experienced an upswing to profitability at the end of Q1 2010
after declaring losses at the end of the common year-end; Diamond Bank Plc - for all
practical intent should be expected to continue making progress in its recovery. The
resilience of the bank according to the bank’s management will henceforth be proved
in the subsequent figures posted since all the banks now have the same timeframe for
their financial reporting.

Going through the bank management’s 2009 December audited report presentation to
analysts-http://www.proshareng.com/reports/view.php?id=2613 - a fundamental
analysis was conducted in section 3 of this report to provide a better appreciation of
the banks realities and prospects. The analysis revealed a worsening non-performing
loan trend with a consequent decline in coverage ratio. The Capital Adequacy Ratio
(CAR) is on the southward trend - a situation that should concern the bank’s risk
management function.

In its presentation to analysts, Diamond Bank Plc management acknowledged the

deteriorating trend of its cost efficiency which still remains high notwithstanding the
exclusion of loan loss provisions expenses. The high trend remains even in the Q1
2010 results. There is therefore the need for a closer watch on this to reverse the
trend in the interest of the investors in the bank, otherwise the burden of expenses on
their earnings remains.

The technical analysis conducted in the 4th section of this report showed that for
fifteen months to May 7th, 2010, Diamond Bank Plc share price recorded +24.40%
appreciations to close at N8.82 from N7.09 it closed at the end of January 2nd, 2009
trading session. This trend placed Diamond Bank Plc as one of the seven banks in
the sector which have recorded price appreciations above their January 2nd,
2009 price levels.

Also, the bank’s share price in the year 2010 to date appreciated by +22.67%, still
placing the bank among the top performing bank in the period, trading above its 200
days moving average of N7.89. This indicates a bullish trend in the bank shares. But
this trend will be more real and sustained if the subsequent results from the bank
could support the technical indices.

We are of the view that with the stable board and management since the Central Bank
of Nigeria policy on banks’ Managing Director/CEO would not affect the bank now, the
bank may reap the dividends such continuity could afford, ceteris paribus.

© 2010 www.proshareng.com May 2010 4

2. The Operating Environment
Since the assumption of office by the incumbent Central Bank of Nigeria Governor,
Sanusi Lamido Sanusi - there have been a wholesome paradigm shift in the banking
industry on many fronts as things appear never to return to the old ways again.

Prominent among the changes that have come into the banking industry is need for
strict adherence to sound risk management beyond a cliché, the adoption of world
class standards in disclosures, and the enthronement of a regulator-sensitive industry.

To achieve the shift in mindset it sought to create, the CBN took a series of steps
which is well documented in our treatise - The BULL IN THE CHINA SHOP report –
(August 22, 2010). In this report, we presented the CBN’s outlook for the financial
market, its interventions and the consequential impact of the steps taken and
proposed – seeking to highlight the implementation variables that could impact the
economy, businesses and the fortunes of the banks.

This was followed up with our 100 Days Intervention Report -

after the
where we
sought to establish the post-intervention realities faced by customers, banks and the
economy as a whole. We indeed undertook a revalidation of the summation of our
report in the earlier analytical work referred to above as a gauge of ‘believability’.

The conclusion drawn was that the CBN’s actions were long overdue but fraught with
many unintended consequences which ought to be managed with a clear sense of
action timing lest we risked creating a state of inertia in the sector that could impact
affairs. The effect on the industry, post the report, revealed that the execution
challenges envisaged were not exaggerated and that the policies and pronouncements
of the Central Bank of Nigeria (CBN) had created a ‘avalanche effect’ on the sector -
the confluence of which undermined the most important ingredient in the financial
market place – trust and clarity of objectives, motives and engagements.

For the avoidance of doubt, we retain the conviction that some sort of intervention was
required at the time it came; and do believe that the scale and size of the intervention
were at a base level required to ‘rein in’ the shift in practice that has all but eroded the
Professional responsibility of banks and bankers.

This eventuality (and its herd management) however meant that banks had to operate
under excruciating but not existential circumstances and changes that impacted on
how they managed their poor risk-based decisions, provisions, focus on new
businesses and management changes; further accentuated by the increased
political/sovereign risk that pervaded the economy between November 2009 and
February 2010 – all generally creating an atmosphere, it would appear, un-conducive
to commercial vibrancy.

Banks, in the country, were therefore subjected to the most rigorous stress test ever
conducted in banking history and under such a clime, it was not unexpected that a
general lull would pervade the market. Indeed, not a few banks had to contend with a
fast-moving news cycle that was fed regularly with scoops from the apex regulators
that ensured a more than 100days news cycle was maintained on the banking sector
and not on the economy itself.

The consequential move against ‘habitual’ debtors through the publication of names of
debtors – most of which were disputed/contested/clarified on the pages of newspapers

© 2010 www.proshareng.com May 2010 5

–had the unintended consequences of criminalising debtors and cause significant
damage to relationships and understandings that had held in the sector.

These set of initial actions by the CBN helped to create a rumour mill that just kept on
giving and in no time, facts were interlaced with fiction and the very lofty motive(s) of
the CBN were juxtaposed with conspiracy theorists and allegations of selective
intervention from all quarters.

What could not be disputed were the revelations of misdemeanours and malpractices
presented by the CBN against identified persons post their audit engagements that
were countered by shock, resistance and confrontation. The CBN, to its credit stood
strong despite subsequent mis-steps to steer the ‘reform’ forward.

Following the conclusion of the first CBN/NDIC joint audit of the banks in the country,
the regulatory authority axed the CEO’s of five banks and in its subsequent and final
audit axed the CEO’s of three additional banks and placed two banks on notice to build
up its capital base by June 2010.

The consequential effect of the audit which went on for about a period of three months
took its toll on individual banks, customers and the relationships that existed. More
importantly, the management and treatment of specialised assets and bank share-
backed collaterals led to subjective but prudence based provisioning that impacted on
the performance results of the cleared and un-cleared banks. This went on till
December 2009 when the CBN audit undertook its year end review and recognised the
need to take a more pragmatic and best practice view of the provisioning required
including the suspension of the general provisioning rule and the introduction of a
prudential guideline to take care of specialised assets.

The adoption of a common year accounting date in the sector will further reveal where
each bank stands in their fundamental and operational strengths. The results released
so far showed that some banks might not have much loan losses to make provisions
for (indeed, some had to plough back over-provisioning either as a function of
recoveries or the subjective application of judgements by inspectors) while others will
have to make additional provisions to reflect the deteriorating conditions of their loan
portfolios, diminution in value of assets, investments, and share backed collaterals or
adjustments necessitated by post audit evidence. Yet, it is evident from the results of
all the ten banks released so far, that some banks’ financial positions have improved
from what was reported by the CBN/NDIC special joint audit reports.

The common year accounting date is expected to create an atmosphere of healthy

competition in financial reporting in the banking sector as observed in the trend of few
banks that had done so – well aware of how such a compliance and improved level of
disclosure will resonate well with an investing public long on suspicion about their
financial health.

The rescued banks however face a different challenge. On the one hand, they may not be
able to present the same level of recovery posted by the cleared banks due to the
alleged precarious situations of their financial positions. On the other hand, they may
not be able to declare results at all as to do so would require them to hold an AGM
which as things stand, may be a difficult thing to achieve given the way events had

The International Financial Reporting Standard being adopted in the sector is expected to
bring to bear on the system a level of transparency which will give the investing public
more confidence in the financial reports of banks - strengths or weaknesses. Most
importantly, when viewed within the context of a common accounting year end date; it

© 2010 www.proshareng.com May 2010 6

should make the December 31, 2010 accounting reporting period a veritable
assessment template.

Following from this must be the expectation from the investment community on the
Asset Management Company being floated by the Central Bank of Nigeria in conjunction
with the Federal Ministry of Finance and backed by the Nigerian Stock
Exchange/Securities & Exchange Commission. The bill has passed through the
legislature and is now awaiting a synchronisation of the bills from the both the lower
and upper house. It must be noted that though the bill is not touted as representing a
cure all for the sector ills; its successful establishment should however go a long way
to providing the much needed respite to the sector, and indirectly to the economy – by
easing liquidity into the system (ceteris paribus). The bill is not without its critics who
question the operational structure, pricing of debts model and disposal issues; partly
as a result of the non-availability of the proposed bill to a wider audience.

Of interest must be the Central Bank of Nigeria’s policy on reviewing the practice of
Universal Banking. This has thus become a factor in the re-shaping of the banking
industry/Sectoral outlook in the coming days – 2010 to be precise – as the group
structure of banks are adjusted to reflect these new realities. Subsidiaries, affiliates
and associated companies will have to be reined in or extricated from pure banking
operations under different models to meet the demands of the new regulatory regime.
It should be noted that a combination of regulatory/supervisory inertia coupled with
misapplication of the concept by banks created the condition under which deposit-
based banks got entangled in linked and synergetic businesses which, left unregulated
or effectively supervised created conditions that impacted on the outcomes we have. It
is hoped that not a few institutions will have to revisit their business strategy and
models to meet this development.

In the closing month of 2009, banks, faced with the challenge of remaining in business
Profitably resorted to laying-off staff, partly to help reduce their operating expenses;
but in the main, to streamline operations relative to the business available now and
foreseeable. This caused some tension in the industry as it soon became widespread
and with such severity that it became a matter for national discourse. Some banks
refrained from this approach, perhaps on the strength of their belief in their business
model; and this went on till late January 2010 when it abated for a while and
continued in April/May 2010 with one of the banks seeking recapitalisation.

The staff issues soon paved way for the CBN policy on terms and tenures for MD/CEO’s of
banks which led to the forward dated exits of three pioneer chief executives of UBA,
Zenith and Skye Banks. This development was professionally well managed by these
institutions that complied with the directive and stabilised their institutions with the
announcement of successors in days and weeks; and ultimately sign-posted a positive
shift in the change management initiative embarked upon by the CBN. The newly
appointed MD/CEO’s have since been approved by the CBN and we can expect a
seamless transition.

The swing of operator focus is now of flight to quality as against flight to safety slogan.
Much emphasis will now be placed on quality on all fronts in the sector and no bank
will want to be seeing defaulting in delivering on quality platform. The imperative for
quality cuts across all the strata of banking businesses and quality of items on their
financials will be of paramount focus to the investing public.

Nigerian banks since then have taken steps to introduce and/or strengthen the
processes and practice of sound corporate governance and leadership succession in
their institutions.

© 2010 www.proshareng.com May 2010 7

The banking sector metrics below show the portraits of the sector based on the results
announced so far.

Peer Results Comparison

Gross Earnings PAT
Audited Result Period Reported % Variance % Variance
Current N'm Previous N'm Current N'm Previous N'm
Access Bank Nine Months 66,076.46 89,552.70 -26.21% -4,402.17 20,814.22 -121.15%
GTB Twelve Months 162,550.00 100,610.00 61.56% 23,690.00 28,320.00 -16.35%
Zenith Fifteen Months 277,300.00 211,600.00 31.05% 20,600.00 52,000.00 -60.38%
UBA Fifteen Months 246,725.00 169,506.00 45.56% 2,375.00 40,825.00 -94.18%
SKYE Fifteen Months 126,665.00 74,615.00 69.76% 1,130.00 15,126.00 -92.53%
DIAMOND Eight Months 67,735.00 108,979.00 -37.85% -8,142.00 5,144.00 -258.28%
FINLAND Eighteen Months 72,386.00 30,779.00 135.18% -149,770.00 -96,726.00 54.84%
IBTC Twelve Months 59,781.00 61,239.00 -2.38% 8,138.00 11,993.00 -32.14%
FIRSTBANK Nine Months 196,400.00 152,500.00 28.79% 3,200.00 33,900.00 -90.56%
Ecobank Plc Twelve Months 59,864.00 55,156.00 8.54% -4,588.00 5,000.00 -191.76%
Source: Proshare Research/Company Financials

Peer Assessment - December 31 2009

Market Price 9.21 16.27 18.2 11.77 15.43 7.5 8.99 0.6 8.08 5.55
EPS -0.27 0.11 1.52 0.11 1.21 0.1 0.43 0.06 -0.56 -0.64
DPS 0 0.1 0.75 0.1 0.45 0.05 0.3 0 0 0
Dividend Payout 0 90.91% 49.34% 90.91% 37.19% 50.00% 69.77% 0.00% 0.00% 0.00%
Dividend Yield 0.00% 0.61% 4.12% 0.85% 2.92% 0.67% 3.34% 0.00% 0.00% 0.00%
PE Ratio -34.11 147.91 11.97 107 12.75 75 20.91 10 -14.43 -8.73
Earnings Yield -2.93% 0.68% 8.35% 0.93% 7.84% 1.33% 4.83% 10.00% -6.93% -11.46%
PAT Margins -6.66% 1.63% 14.57% 0.96% 7.43% 0.89% 13.61% -206.90% -12.02% -7.66%
Shares in issue in
16.437 29.01 23.31 21.56 31.39 11.58 18.75 16.721 14.475 7.218
Billion units
Source: Proshare Research/Company Financials

Peer Assessment - Q1 2010 - March 31, 2010

Market Price 9.21 16.27 18.2 11.77 15.43 7.5 8.99 0.6 8.08 5.55
EPS 0.24 0.43 0.38 0.07 0.3 0.19 0.43 0.06 0.11 0.15
PE Ratio 38.38 37.84 47.89 168.14 51.43 39.47 20.91 10 73.45 37
Earnings Yield 2.61% 2.64% 2.09% 0.59% 1.94% 2.53% 4.83% 10.00% 1.36% 2.70%
PAT Margin 14.47% 19.79% 33.07% 3.23% 17.28% 9.44% 9.44% 7.92% 6.23% 7.82%
Shares in issue in
16.437 29.01 23.31 21.56 31.39 11.58 18.75 16.721 14.475 7.218
Billion units
Source: Proshare Research/Company Financials

Price movements of stocks in the banking sector in 2010 have been positive as all the
stocks in the sector with the exception of Union Bank Nigeria Plc and Ecobank Nigeria
Plc. (which recorded a decline of -10.24% and -42.97% respectively).

Diamond Bank Plc – the subject of this report, placed eight position in the year to
date appreciation ranking with a +22.67% price growth.

© 2010 www.proshareng.com May 2010 8

% Change Jan 10- % Change May % Change
30-Apr-09 4-Jan-10 7-May-10
Apr 09 10-Jan 10 May 10-Apr 09

STERLNBANK 1.6 1.26 -21.25% 2.23 76.98% 39.38%

SKYEBANK 4 5.48 37.00% 8.21 49.82% 105.25%
IBTC 6.25 7.16 14.56% 10.39 45.11% 66.24%
SPRINGBANK 5.59 0.73 -86.94% 1.02 39.73% -81.75%
UNITYBNK 1.31 0.87 -33.59% 1.11 27.59% -15.27%
ACCESS 5.65 7.55 33.63% 9.5 25.83% 68.14%
UBA 10.71 10.81 0.93% 13.48 24.70% 25.86%
DIAMONDBNK 4.85 7.19 48.25% 8.82 22.67% 81.86%
FIDELITYBK 2.3 2.52 9.57% 3.04 20.63% 32.17%
WEMABANK 2.09 0.97 -53.59% 1.15 18.56% -44.98%
OCEANIC 6.9 1.77 -74.35% 2.06 16.38% -70.14%
FIRSTINLND 2.3 0.55 -76.09% 0.64 16.36% -72.17%
ZENITHBANK 14.4 13.5 -6.25% 15.6 15.56% 8.33%
FCMB 5.75 7.01 21.91% 7.86 12.13% 36.70%
GUARANTY 12.76 15.78 23.67% 17.6 11.53% 37.93%
FIRSTBANK 15.49 14 -9.62% 15.55 11.07% 0.39%
INTERCONT 8.2 1.69 -79.39% 1.87 10.65% -77.20%
AFRIBANK 5.18 2.43 -53.09% 2.52 3.70% -51.35%
PLATINUM 5.23 1.38 -73.61% 1.43 3.62% -72.66%
UBN 11.4 6.25 -45.18% 5.61 -10.24% -50.79%
ECOBANK 27.96 10.1 -63.88% 5.76 -42.97% -79.40%
Source: Proshare Research/NSE


Critical Priorities of the Bank as Presented

resented by the Management in its April 30, 2009
Audited Results presentation. Evaluation
Maintain Strong Revenue Growth The impact of these priorities geared at
Increase market reach through branch and improving the bank’s revenue growth did not
alternative distribution channel expansion manifest in the revenue reported in the December
Improve service delivery year end financials. Indeed, further decline was
Focus on high value customers experienced when compared with the preceding
Focus on fee-based activities and services year’s pro-rated figures.
Intensify low-cost deposit mobilizations While improvement in deposit mobilisation is
acknowledged, the expected impact on revenue
growth was not evident, but remains a good sign.

Hold Cost Steady The facts as evident in the expenses figures

Major cost management initiatives presented could not support the priorities pursued
Outsourcing less sensitive and non-core in the eight months period. The cost efficiency of
functions the bank recorded a worsening trend in the
Avoid cost overrun in project executions periods under review.

Improve Internal Efficiencies Operations cost and cost per staff remain high – a
Establishment of Loan factory concern for an aspect of the banks’ critical
Operations automation and optimization priorities.
Push non-value activities to Alternative
Distribution channels (ADC)

© 2010 www.proshareng.com May 2010 9

Sales staff time optimization
Front/back office staff alignment
Reinforce Risk Management The reality of the operational activities of the
bank as contained in the results released did not
Focus credit growth in established market support some of these priorities. We can only see
where we have experience. evidence of growth in credit as shown by loans
Improve credit monitoring activities with and advances and regulatory compliance.
special emphasis on high risk areas
Ensure appropriate risk pricing Other critical areas such as loan recovery,
Implement a loss event database to monitor improved credit monitoring and appropriate risk
and manage operational risk activities pricing would benefit from an increased focus in
Full regulatory compliance and zero the intervening period.
tolerance for violations
Focus on loan recovery


Optimize the business organically:

Increased business focus on the retail segment to capture skewed growth
potential and prevent marginalization
Enhanced risk adjusted growth in our core business segments – middle market
(or National corporate) and Corporate banking
Focus on organic profit growth through continuation of Project Sparkle
initiatives - improved efficiency and productivity (i.e. grow profits faster than
costs, assets and capital)

Inorganic Growth by acquisition and integration of another Nigerian Bank

A purely organic approach will not create the desired incremental future growth
A number of banks are available for acquisition with focus on the immediately
available CBN supported banks.
Consider alternate acquisition options outside CBN supported banksn March
2009 Audited Results
For Organic Growth: Project Sparkle introduces:
Efficient and scalable processes to enable future profitable growth.
Sales & marketing initiatives as foundation of the future growth in high value
retail segments.
Risk management as enabler to identify expansion areas within the given risk
Cost management and sales initiatives enabling superior ROE (>20%) and CIR
(50%) ratios

For Inorganic Growth: Project Sparkle introduces:

Efficient and scalable processes as basis for integration of other (external)
Cost management, sales and marketing initiatives enables the realization of
optimal synergic benefits from a strategic merger.
Sparkle increase value of bank and thus is more attractive for potential

For more detail of the Management presentation review, see pages 43-45 of the
presentation here: http://www.proshareng.com/reports/view.php?id=2613 t

© 2010 www.proshareng.com May 2010 10

3. Fundamental Analysis
The Objective: To examine in a snapshot, the bank's financials and operations, especially
earnings, growth potential, assets, debt, management, products, and competition through
financial ratios arrived at by studying the balance sheet and profit & loss account over a
number of years.

This analysis is more effective in fulfilling long – term growth objectives of shares, rather than
their short – term price fluctuations.

In the Nigerian Stock Market, this has traditionally been the key focus of most players and it
remains a guiding beacon as to what could possible happen to a stock. Our approach to
fundamental analysis therefore takes into consideration only those variables that are
directly related to the company itself, rather than the overall state of the market or
technical analysis data, the former of which was reviewed in section 2 above and the
latter, a subject for review in section 4 below.

Diamond Bank Plc

Assets 2009 Dec 2009 April 2009 April April 09-Dec 09 April 09-Dec 09
N' billion N' billion N' billion % Variance % Variance
8 Months 12 Months 8 Months 12 Months 8 Months
Cash & Bank Balances 70.429 54.744 36.496 28.65% 92.98%
Short Term Investments 9.09 11.502 7.668 -20.97% 18.54%

Loans and Advances to Customers 322.82 308.815 205.877 4.54% 56.80%

Advances under Finance Lease 6.963 6.15 4.1 13.22% 69.83%

Long Term Investments 68.777 66.458 44.305 3.49% 55.23%

Deffered Taxation 7.858 4.416 2.944 77.94% 166.92%
Other Assets 22.114 54.705 36.47 -59.58% -39.36%
Investment Properties 3.475 2.651 1.767 31.08% 96.62%
Fixed Assets 37.567 34.156 22.771 9.99% 64.98%
Total Assets 650.757 682.078 454.719 -4.59% 43.11%
Depositis 482.056 466.889 311.259 3.25% 54.87%
Due to Other Banks & Financial
14.659 8.557 5.705 71.31% 156.97%
Taxation 3.827 3.826 2.551 0.03% 50.04%
Deffered Taxation 1.962 3.525 2.35 -44.34% -16.51%
Dividend Payable 0.178 0.164 0.109 8.54% 62.80%
Other Liabilities 23.104 59.151 39.434 -60.94% -41.41%
Long Term Borrowings 19.051 23.708 15.805 -19.64% 20.54%
Total Liabilities 544.664 565.82 377.213 -3.74% 44.39%
Capital and Reserves
Capital 7.238 7.238 4.825 0.00% 50.00%
Reserves 98.409 106.766 71.177 -7.83% 38.26%
Shareholders' Fund 105.647 114.004 76.003 -7.33% 39.00%
Source: Proshare Research/Company Financials

© 2010 www.proshareng.com May 2010 11

Diamond Bank Plc
2009 Dec 2009 April 2009 April Apr 09-Dec 09 Apr 09-Dec 09
N' billion N' billion N' billion % Variance % Variance
8 Months 12 Months 8 Months 12 Months 8 Months
Gross Earnings 67.736 108.979 72.653 -37.84% -6.77%
Interest Income 50.746 77.824 51.883 -34.79% -2.19%
Interest Expense 24.896 35.831 23.887 -30.52% 4.22%
Net Interest Income 25.849 41.993 27.995 -38.44% -7.67%
Operating Income 42.458 71.874 47.916 -40.93% -11.39%
Operating Expenses 30.087 41.349 27.566 -27.24% 9.15%

Provision for Loan Losses 24.745 24.623 16.415 0.50% 50.74%

Profit Before Tax -12.374 5.901 3.934 -309.69% -414.54%

Taxation 4.199 0.73 0.487 475.21% 762.81%
Profit After Tax -8.174 5.172 3.448 -258.04% -337.06%
Minority Interest 0.324 -0.274 -0.182 -218.42% -277.63%
Profit After Tax &
-8.142 5.144 3.429 -258.28% -337.42%
Minority Interest
Source: Proshare Research/Company Financials


Gross Earnings and Interest Income: The gross earnings for the eight months
period closed lower to the preceding twelve months period by -37.84%. Comparing the
eight months period to December 2009 with the pro-rated eight months period to
April, 2009 still showed a decline by -6.77%.

The decline could be attributed to higher rate of decline recorded in Interest Income
and Operating income components for the reporting periods. While expenses variance
with the preceding period showed higher figures above the current figures, the reverse
is the case for the income components. Generally, the revenue earnings capacity of
the bank suffered a relative decline.

The evidence of revenue growth – represented by the bank has having been generated
through the growth in loan volume and commission/fees from bond trading could not
be reconciled as it indeed does contradict with the figures recorded by the bank – a
decline in gross earnings for both comparable periods.

Loans and advances, a key contributor to interest income recorded growth of +4.54%
and +56.80% for eight to twelve months and the prorated eight months comparable
periods respectively. Interest income conversely recorded a decline by -34.79% and -
2.19% for the two comparable periods.

© 2010 www.proshareng.com May 2010 12

60% 53%
16.74% Interest Income % Growth
20% 12.05%
10% 4.54%
Loans and Advances %
0% Growth
-10% Access IBTC Diamond Zenith
-40% -34.79%
Source: Proshare Research

Deposit Base and Net Interest Margin: The bank recorded an improvement in its
deposit base for the period under review with +3.25% deposit growth in eight month
as compared with the previous year twelve month figures. Eight months to the
prorated previous year eight months would show +54.87% deposit growth. The
cleared status of the bank according to the CBN bifurcation contributed to the

Other factors according to the Management of the bank include the bank’s strong retail
network and deliberate focus on attracting a larger percentage of demand deposits,
rather than the more expensive term deposits aided the deposit growth in the period
under review.

However, the bank experienced a decline in its net interest margin to +50.94% in the
eight months period to December 31st, 2009 from +53.96% of the previous year
twelve months.

Net Interest Margin Compared

80.00% 76.16%

70.00% 66.09% 66.46%

60.00% 56.62%

40.00% Common Year



53.94% 73.43% 61.59% 67.22% 57.00% 59.46%
Diamond Access Zenith Guaranty UBA IBTC

Source: Proshare Research

Financial Efficiency: The bank’s financial efficiency, measured by cost to income

ratio, showed a decline as the rate of cost to income ratio rose to 75.54% (excluding
Loan loss Expense) compared with 72.66% recorded in the twelve months period to
April 30th, 2009. Management represents that the increase in the cost to income ratio
was attributable to branch expansion, cost of termination of gratuity and cost of

© 2010 www.proshareng.com May 2010 13

project ‘sparkle’. Management expects the gains from project sparkle and other
initiatives to reflect in the current period.

Higher Operating Expenses: The rise in operating expenses to 70.86% as at 31st

December 2009 from 57.73% recorded in the twelve months period to April 30th, 2009
contributed to the deterioration in the bank’s financial efficiency. Notwithstanding the
staff rationalisation carried out, operating costs (in which the labour cost represents a
significant portion) remains on the high side. There is need for critical evaluation and
assessment of cost to income relationships by the management. In considering this,
the bank’s management may need to reconsider the workability of its critical priorities
bordering on holding cost steady.

Loan Loss Expense (Provisions): The N24.745bn loan loss provisions that appeared
in the book of the bank contributed to the loss position reported. But for the loan loss
provision, the bank would still have had 24.46% of the gross earnings for its
profitability at the close of the eight months period.

This raises concerns for the bank’s risk management function; as for all banks under a
risk-biased regulatory environment.

The N24.623bn loan loss provisions made in the 2009 April account of the bank
following the conclusion of the CBN/NDIC joint audit exercise points to a deteriorating
asset condition which is hoped would be halted in the current year.

Non-Performing Loans: The percentage of non-performing loans to total loans

soared to 18.2% from 7.4% reported at the end of full year to April 30th, 2009.

This may be a pointer to the fact that much of the bank’s non-performing loans are yet
to be recovered and this may be showing indications of likelihood of further provisions
in the days ahead.

The actual amount of non-performing loans recovered by the bank may prove a better
indicator of the asset status.

© 2010 www.proshareng.com May 2010 14

Contributions to rise in provisions
in N' billion
Underwriting Commitment 1.10
Operational Loss 2.70
Automobile 2.00
Margin 2.20
Oil & Gas 2.50
Hospitality 6.40

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00

The bank must be concerned about its asset quality for the periods under review. The
non-performing loans ratio spiked up to 18.2% as at December 31st 2009 from as low
as 7.4% recorded at the close of April 30th, 2009 full year report. Loan coverage ratio
also was worse off from 102.1% as at December 31st, 2009 to close low at 64.6% by
December 31st 2009.

The bank’s risk management department may need to do a reappraisal of loans

distributions to sectors to mitigate the reoccurrence of the scenario above. From the
total non-performing loans, only 66% have prospect of recovery as 34% have been
categorised as lost according to the December 2009 presentation by the management.

The non reversal of this trend will create a heavy burden on the bank’s earning
capacity which translates into a cost to investors, instead of returns. This trend may
also place the bank at a competitive disadvantage among its peers and other players
in the sector. The sectoral distribution is captured in the graph below:

NPL by Sector @ Dec 2009

25% 23%
20% 19%
20% 16% 16%
15% 12%
Transport Fin and Real Estate Agric Energy Others

Non-Performing Loans and CAR: In the management’s presentation – reference to

how much of the non-performing loans have been recovered by the bank was omitted.
This information should enable an informed assessment the recovery effort on
outstanding/toxic loans in its book. In the absence of this absolute figure, the following
ratios might serve as a veritable pointer to performance, viz:

© 2010 www.proshareng.com May 2010 15

40.00% 35%
25.00% 20.22%
20.00% 18.03% 18.03%
15.00% 12.07%
CAR Previous









Business Segment Contribution: Retail banking segment remains the most
profitable department with N4.9 billion profit after tax in the eight months period,
down from N9.8 billion reported by April 30th, 2009. Corporate banking and
Investment banking segments posted loss positions of N14.3 billion and N2.1 billion
respectively. The loss position of the two segments when compared with the previous
trend to April 30th, 2009 was worrisome as the negative figures rose very significantly.

2009 Dec Revenue & Profitability Snapshot Earnings Comparison

Revenue (N'bn) PBT (N'bn) Dec '09 (N'bn) Dec '08 (N'bn)
Regional 48.5 4.9 43.6 11.5
Corporate 18 -14.3 23.2 8
Insurance 0.3 -0.8 0.3 -0.3
Investment 1 -2.1 0.8 -2


Gross Revenue and Profit after Tax

Comparing the eight months result released for the period ended 31st December, 2009
with the preceding year twelve months results, Gross Earnings declined by 37.84% to
close at N67.736 billion compared with N108.978 billion reported in the twelve months
period to April 30th, 2009. The bank reported Loss before tax of (N13.374 billion) as
against N5.901 billion profit reported by April 30th, 2009.

There was a net loss position of (N8.174 billion) as against N5.172 billion net profit
recorded in the preceding twelve month period. Profit before tax and profit after tax
consequently showed -309.69% and -258.04% variances respectively.

Diamond Bank Plc recorded outstanding growths in both profit before tax margin and
after tax margin of 26.83% and 21.21% respectively in its 2008 financial year after
which the trend has been on the decline.

The decline culminated in -18.27% and -12.07% for Profit before tax and Profit after
tax respectively in the most recent audited financial results. The loss position reported
accounted for the negative figures.

© 2010 www.proshareng.com May 2010 16

The chart above reveals that the bank does not have a stable and consistent
profitability trend. Three of the five reporting periods covered posted declines in both
PBT and PAT. This shows that investors could only be said to have gotten improved
value for their banks in 2007 and 2008 financial years (outside any capital appreciation
that might have occurred during the periods covered).

The trend has definitely created a run on the earnings per share (EPS) of the bank as
depicted by the chart below.

EPS Trend
0.5 0.59
0.36 EPS
0 -0.02
2005 2006 2007 2008 2009 2009 Dec
-0.5 -0.56


© 2010 www.proshareng.com May 2010 17

Net Interest Margin of other Banks Compared

The net interest margin of Diamond Bank Plc closed lower of the preceding reporting
period figures, at a time when most banks in its league recorded an uptrend in their
figures. This, when compared with the growth trend in the company’s loans and
advances posted a mismatch.

Loans and Advances

Diamond Bank’s loans and advances figures as at 31st December, 2009 rose by 4.54%
to close at N322.820 billion compared with N308.815 billion for the preceding twelve
months period.

Loan to deposit ratio in the last six accounting periods apart from a decline to 46.37%
recorded in 2007 has been on the consistent growth till date. However, there was no
commensurate impact in its accruable earnings.

© 2010 www.proshareng.com May 2010 18

The chart of the deposit composition contradicts the management presentation where
the growth in deposits was attributed to large distribution networks of the bank,
deliberate focus on demand deposits rather than more expensive deposits. Term
deposits take the largest share of the deposit compositions in the reporting period
under review.

Total Assets and Total Deposits

Total assets of the bank in 2006 and 2008 recorded 71.18% and 94.94% growths
respectively, followed by 43.50% growth recorded in 2007. Assets diminution
however set in with the bank’s April 30th, 2009 reporting period with 9.02% growth
recorded in the period.

© 2010 www.proshareng.com May 2010 19

In the eight months period, total assets declined by 4.59% to close at N650.757
billion. Comparing eight months period with the pro-rated year eight months period
showed 43.11% assets growths. In general, the bank assets due to trends in some of
the assets components continue to grow.

Earnings Performance

The Bank’s earnings performance, as measured by the returns on average assets and
returns on average equity declined.

The banks return on equity and return on assets as at April 30th 2009 stood at 4.54%
and 0.76% respectively, decreased by 6.50% and 1.29% respectively as compared to
April 2008. However, as at December 31st, 2009 return on equity and assets declined
to -7.74% and -1.26% respectively. These negative figures were as a result of the net
loss position reported by the bank.

Shareholders’ Funds and Total Assets

Diamond Bank shareholders’ fund assumed a decline since April 30th 2009 accounting
year with -1.82% and -7.33% declines for April 30th 2009 and December 31st 2009

The impact of huge non-performing loans and consequent loan loss provisions
accounts for this decline in the shareholders’ fund.

Decline in shareholders’ fund is itself can be a good indicator of a weakening Capital

Adequacy Ratio of a bank. The efficacy of a sound risk management by a bank can be
determined as otherwise on account of a depleting shareholders’ fund. The Bank’s
shareholder’s fund closed at N105.646bn by December 31st 2009 from N114.004bn
reported as at 30th April, 2009 as against +120.04% growth recorded in the year

© 2010 www.proshareng.com May 2010 20

Capital Adequacy

The bank’s capital adequacy has been on the decline trend since April 30th, 2009
financial year. This is not unconnected with the high level of risk posed against the
capital and assets of the bank due to huge non-performing loans in its books. Diamond
Bank’ CAR as at 31st December, 2009 stood at 16.23%

© 2010 www.proshareng.com May 2010 21


Diamond Bank Plc

Diamond Bank Plc Q1 2010 Results Mar-10 Mar-09
% Variance
Income Statement N ' billion N ' billion
Gross Earnings 24.50 28.90 -15.22%
Operating Income 16.50 21.30 -22.54%
Operating Expenses -11.60 -10.20 13.73%
Operating Profit 4.90 11.10 -55.86%
Provision for Loan Losses -2.90 -2.40 20.83%
Profit and Loss Before Tax 2.00 8.70 -77.01%
Profit After Tax 1.50 7.20 -79.17%

Balance Sheet Items N ' billion N ' billion % Variance

Deposits 462.40 376.50 22.82%
Loans and Advances 326.10 375.60 -13.18%
Total Assets 673.80 632.70 6.50%
Equity 106.10 110.10 -3.63%
Balance Sheet Size 801.30 751.90 6.57%
Key Financial Ratios
Earnings Per Share in kobo 0.10 0.50
Annualized ROE 5.80% 26.10%
Annualized ROA 0.90% 4.70%
Risk Adjusted Capital Ratio 20.40% 20.80%
Annualised Net Interest Margin 7.90% 9.10%
Non-Performing Loan Ratio 17.50% 5.60%
Cost to Income Ratio 70.10% 47.90%
Loan to Deposit Ratio 80.60% 104.60%
Liquidity Ratio 38.40% 33.30%
Coverage Ratio 72.70% 83.30%
PBT Margin 8.16% 30.10%
PAT Margin 6.12% 24.91%
Oparating Income/Operating Expenses 70.30% 47.89%
Source: Proshare Research/Company Financials


Revenue and Profitability Gross earnings in the quarter recorded a negative
growth of -27.10% to close at N24.50 billion compared with N33.6 billion recorded in
the preceding year comparable period. Declines recorded in interest income and some
other income components contributed to the decline recorded.

Profit after tax also declined by -77% to close at N2.0 billion from N8.7 billion recorded
in the previous year’s comparable period.

The EPS consequently declined from 50k reported in the preceding year to 11k.

© 2010 www.proshareng.com May 2010 22

Cost to Income Ratio: The bank’s efficiency ratio measured by cost to income ratio
stood at 93.77% compared with 78.67% of the preceding year comparable period.
This still shows decline in the bank’s efficiency ratio.

© 2010 www.proshareng.com May 2010 23

Return on Assets and Return on Equities: Access Bank Return on Assets at the
end of the quarter inched up to +16.34% from +14.45% in the preceding comparable
period. Return on Assets followed the growth trend, closing higher to +4.12% from
+3.75% of the preceding comparable period.

Deposits and Loans & Advances: The bank’s deposits in the first quarter of the year
recorded growth bank 22.82% to close at N462.40 billion compared with N376.50
billion recorded in the preceding year comparable period. The bank’s deposits still
remains largely concentrated on the ‘’ expensive term deposits’’ according to the

© 2010 www.proshareng.com May 2010 24

4. Technical Analysis
The Objective: To review the stock valuation by relying on the assumption that market data,
such as charts of price, volume, and open interest, can help predict future (usually short-
term) market trends. Unlike fundamental analysis, the intrinsic value of the stock is not part of
the consideration here. More and more investors are beginning to appreciate and rely on
technical analysis in reviewing stocks on the Nigerian Stock Exchange because of the
proven fact that market psychology influences trading in a way that enables predicting
when a stock will rise or fall. For that reason, technical analysis are market timed based and
predicated on the belief that technical analysis can be applied just as easily to the market
as a whole as to an individual stock.


Diamond Bank Plc in the last fifteen months to May 7th, 2010 recorded +24.40% to
close at N8.82 from N7.09 it closed at the end of January 2nd, 2009 trading session.
This trend placed Diamond Bank Plc as one of the seven banks in the sector which
have recorded price appreciations above their January 2nd, 2009 price levels.

In the year 2009 alone, the share price of the bank closed with +4.37% appreciations,
as against -33.80% depreciations recorded in the entire market in the period. This
positive performance though slightly showed a level of resilience in the bank’s stock in
the period under review notwithstanding the general bearish trend of the market
coupled with the shake up in the banking sector from August 14th, 2009.

In the year 2010, the bank as at 7th May , 2010 recorded year to date appreciation of
+23% which is above +19% sector average appreciations for the same period.

The trend so far in the price movement of the shares of the bank shows that the share
of the bank is one of the performing stocks in the sector, emerging in the class of the
top five performing in the sector.

© 2010 www.proshareng.com May 2010 25


The All-Share Index and Diamond Bank Plc share price are moving almost in the same
direction with Diamond Bank Plc share price moving above the All-Share Index . In the
year 2009 alone, the share price of the bank closed with +4.37% appreciations, as
against -33.80% depreciations recorded in the entire market in the period.

In the year 2010, while Diamond Bank Plc share price appreciated by +23%, All-Share
Index has recorded year to date appreciation of +32.06%. This shows ASI has
outperformed Diamond Bank Plc in the current year alone.

As illustrated from the graph below, the Diamond Bank Plc share price now trades
below its 20 days and 50 days moving averages but above its 200 days moving
average of N8.89, N9.12 and N7.89 respectively.

Technically, Diamond Bank Plc share trading above its 200 days moving average would
suggest that the bank has attained a bullish outlook, yet it has to be sustained given
the developments with its 20 and 50 day moving averages.

The price moving average trend showed that Diamond Bank Share price started
trading above its 200 days moving average at the end of September 7th, 2009 trading
day and has since sustained the trend to date.

© 2010 www.proshareng.com May 2010 26

5. Analyst Insight

The Objective: This is not an opinion on the stock (given that we still await specific
information required to form an objective opinion). To enable investors make sense of the
data released however, and considering the significance of the paradigm shift taking place
in the banking industry; we have thus provided an insight into the deductions we are able to
make from the information available for further review and professional advice.

Diamond Bank Plc’s performance compared with the results released so far in the
banking sector would be considered as providing a less than impressive outlook
relative to expectation - with reference to its common year end audited account to
December 31st, 2009.

We are reluctant to believe that there is no issue with regards to the trend of its loan
loss expense of N24.745bn after the credibility defining statement at the end of the
April 2009 statement on a one-off provisioning. Yet, we must bear in mind that the
additional provision was a CBN/NDIC directive which might suggest that there is much
more with regards to the risk management functions application of the prudential
guidelines. The consolation here is provided by the very many changes the CBN itself
has made with regards to the application of these guidelines which may or may not
therefore be a reflection on the bank’s true asset quality status. The returns from
hereon, after the reversal of the 2% general provision by the CBN, should reflect
recovery efforts and the plough back of provisions less any new provisions that may be
required; considering the rising trend in the bank’s non-performing loan profile,
skyrocketing to N68.211bn from N25.200bn recorded as at April 30th, 2009.

The bank, like so many others also faced a tumultuous year which may or may nit
impacted its ability to manage its cost profile. This, management has represented is
receiving the necessary attention.

The key indices revealed by the ‘beyond the line’ analysis conducted here suggest that
2010 will be a year of serious hard work for the bank to re-calibrate its books and
earning potentials.

The improvement and return to profitability recorded in Q1 2010 is expected to be

sustained by the bank.

© 2010 www.proshareng.com May 2010 27

6. Appendix – Financial Summary

Diamond Bank Plc

Financial Summary - 5 years
2005 2006 2007 2008 2009 April 2009 Dec
Income Statement N' billion N' billion N' billion N' billion N' billion N' billion
Gross Earnings 12.737 18.049 30.295 60.438 108.979 67.736
Operating Income 12.737 18.049 30.675 47.732 71.874 42.458
Operating Expenses 8.372 16.497 20.798 26.711 41.349 30.087
Provision for Loan Losses 0.85 0.172 2.236 4.808 24.623 24.745
Profit Before Tax 3.514 1.379 7.641 16.214 5.901 -12.374
Taxation 1.005 1.468 1.87 3.393 0.73 4.199
Profit After Tax 2.509 -0.888 5.77 12.821 5.172 -8.174
EPS 0.59 -0.02 0.74 1.18 0.36 -0.56
Shares in Issue 4.253 44.400 7.797 10.865 14.367 14.596

Balance Sheet
Cash & Bank Balances 13.528 32.227 85.657 62.864 54.744 70.429
Short Term Investments 34.756 46.565 40.639 42.059 11.502 9.090
Loans and Advances to Customers 42.573 80.560 100.972 240.449 308.815 322.820
Advances under Finance Lease 2.058 4.090 8.051 11.501 6.150 6.963
Long Term Investments 1.557 3.599 11.798 30.834 66.458 68.777
Deffered Taxation 0.0687 0.301 0.451 1.102 4.416 7.858
Other Assets 13.723 19.651 21.543 51.821 54.705 22.114
Investment Properties 0.000 0.000 0.833 1.319 2.651 3.475
Fixed Assets 3.376 8.473 16.870 27.523 34.156 37.567
Total Assets 130.654 223.651 320.950 625.669 682.078 650.757
71.18% 43.50% 94.94% 9.02% -4.59%
Depositis 80.013 148.563 217.737 419.708 466.889 482.056
Due to Other Banks & Fin. Inst. 1.473 2.755 16.307 8.531 8.557 14.659
Taxation 0.897 1.306 1.703 2.813 3.826 3.827
Deffered Taxation 0.485 0.927 1.325 2.534 3.525 1.962
Dividend Payable 0 0 0 0 0.164 0.178
Other Liabilities 19.566 29.106 21.639 54.358 59.151 23.104
Long Term Borrowings 6.708 8.916 7.821 18.587 23.708 19.051
Total Liabilities 109.142 191.573 266.532 506.531 565.82 544.664

Capital and Reserves

Capital 3.038 3.801 4.699 6.579 7.238 7.238
Reserves 17.652 27.037 48.075 109.544 106.766 98.409
Shareholders' Fund 20.69 30.838 52.774 116.123 114.004 105.647
49.05% 71.13% 120.04% -1.82% -7.33%
Source: Proshare Research/Company Financials

© 2010 www.proshareng.com May 2010 28


Diamond Bank Plc

2009 Dec 2009 April 2008 Dec 8/12 compared 8/8 compared
Income Statement N' billion N' billion N' billion % Variance % Variance
8 Months 12 Months 8 Months 12 Months 8 Months
Gross Earnings 67.736 108.979 72.653 -37.84% -6.77%
Interest Income 50.746 77.824 51.883 -34.79% -2.19%
Interest Expense 24.896 35.831 23.887 -30.52% 4.22%
Net Interest Income 25.849 41.993 27.995 -38.44% -7.67%
Operating Income 42.458 71.874 47.916 -40.93% -11.39%
Operating Expenses 30.087 41.349 27.566 -27.24% 9.15%
Provision for Loan Losses 24.745 24.623 16.415 0.50% 50.74%
Profit Before Tax -12.374 5.901 3.934 -309.69% -414.54%
Taxation 4.199 0.730 0.487 475.21% 762.81%
Profit After Tax -8.174 5.172 3.448 -258.04% -337.06%
Minority Interest 0.324 -0.274 -0.182 -218.42% -277.63%
Profit After Tax & Minority Interest -8.142 5.144 3.429 -258.28% -337.42%


2009 Dec 2009 April 2008 Dec 8/12 compared 8/8 compared
Assets N' billion N' billion N' billion % Variance % Variance
8 Months 12 Months 8 Months 12 Months 8 Months
Cash & Bank Balances 70.429 54.744 36.496 28.65% 92.98%
Short Term Investments 9.090 11.502 7.668 -20.97% 18.54%
Loans and Advances to Customers 322.820 308.815 205.877 4.54% 56.80%
Advances under Finance Lease 6.963 6.150 4.100 13.22% 69.83%
Long Term Investments 68.777 66.458 44.305 3.49% 55.23%
Deffered Taxation 7.858 4.416 2.944 77.94% 166.92%
Other Assets 22.114 54.705 36.470 -59.58% -39.36%
Investment Properties 3.475 2.651 1.767 31.08% 96.62%
Fixed Assets 37.567 34.156 22.771 9.99% 64.98%
Total Assets 650.757 682.078 454.719 -4.59% 43.11%
Depositis 482.056 466.889 311.259 3.25% 54.87%
Due to Other Banks & Financial Institutions 14.659 8.557 5.705 71.31% 156.97%
Taxation 3.827 3.826 2.551 0.03% 50.04%
Deffered Taxation 1.962 3.525 2.350 -44.34% -16.51%
Dividend Payable 0.178 0.164 0.109 8.54% 62.80%
Other Liabilities 23.104 59.151 39.434 -60.94% -41.41%
Long Term Borrowings 19.051 23.708 15.805 -19.64% 20.54%
Total Liabilities 544.664 565.820 377.213 -3.74% 44.39%
Capital and Reserves
Capital 7.238 7.238 4.825 0.00% 50.00%
Reserves 98.409 106.766 71.177 -7.83% 38.26%
Shareholders' Fund 105.647 114.004 76.003 -7.33% 39.00%

© 2010 www.proshareng.com May 2010 29

You are given the limited right to print this report and to Nothing published in this report and on our site should be
distribute it by any means. You can print out pages and use considered as investment advice. Any prediction made on
them in your private discussion groups as long as you the direction of the stock market or on the direction of
acknowledge PROSHARE and you do not alter the report i n d i vi d u a l sto cks ma y p ro ve to b e i n corre ct.
in any way. Most importantly, you should not charge for it. Readers/Users/visitors are expected to refer to other
investment resources to verify the accuracy of the data
Stock trading is inherently risky and you agree to assume published in the report on their own. Neither Proshare nor
complete and full responsibility for the outcomes of all its principals, agents, associates, employees or licensed
trading decisions that you make, including but not limited stockbrokers, are licensed to provide investment advice
to loss of capital. None of the stock trading calls made by through this publication.
Proshare, its analyst board, employees, contributing
partners and companies associated with it should be No materials in the report, either on behalf of Proshare, or
construed as an offer to buy or sell securities, nor advice to any participant in The Analyst Network should be taken as
do so. Proshare is not responsible for any errors, investment advice directly, indirectly, implicitly, or in any
omissions or representations on any of the pages in this manner whatsoever, including but not limited to trading of
report. Proshare does not endorse in anyway any stocks on a short term or long term basis, or trading of any
advertisers or firm(s) used as case studies in the report. financial instruments whatsoever. Past Performance Is
Please verify the veracity of all information on your own Not Indicative of Future Returns. All analyst commentary
before undertaking any alliance. provided in this report is provided for information purposes
only. This information is NOT a recommendation or
Our opinions and analyses are based on sources believed solicitation to buy or sell any securities. Your use of this
to be reliable and are written in good faith, but no and all information contained in this report is governed by
representation or warranty, expressed or implied, is made this Terms and Conditions of Use. This material is based
as to their accuracy or completeness. The information in upon information that we consider reliable, but we do not
this report is updated from time to time. Proshare however represent that it is accurate or complete, and that it should
excludes any warranties (whether expressed or implied), be relied upon, as such.
as to the quality, accuracy, efficacy, completeness,
performance, fitness or any of the contents of the report, You should not rely solely on the Information in making any
including (but not limited) to any comments, feedback, investment. Rather, you should use the Information only
interviews, articles reproduced and advertisements as a starting point for doing additional independent
contained in the report. research in order to allow you to form your own opinion
regarding investments. By using this report including any
All information contained in our report or on our website software and content contained therein, you agree that
should be independently verified with the companies use of the Service is entirely at your own risk. Any
mentioned. information, opinions, advice or offers posted

The editor and publisher are not responsible for errors or by any person or entity logged in to the Proshare website
omissions. You should consult a qualified broker or other or any of its associated sites is to be construed as public
financial advisor prior to making any actual investment or conversation only. Proshare makes no warranties and
trading decisions. You agree to not make actual stock gives no assurances er garding the truth, timeliness,
trades based on comments in the report, nor on any reliability, or good faith of any material posted at Proshare.
techniques presented nordiscussed in this report or any
other form of information presentation. All information is Proshare Nigeria is the country's premier investor
for educational and informational use only. You agree to relations/education and analyst services platform
consult with a registered investment advisor, which we are providing a critical role in ensuring that market confidence
not, prior to making any trading decision of any kind. & safety is enshrined in the conduct of/and market reliance
Hypothetical or simulated performance results have on the information and activities of firms quoted on the
certain inherent limitations. Unlike an actual performance Nigerian Stock Exchange; as a wealth creator for the
record, simulated results do not represent actual trading. investing public. In delivering this service, the firm works
Since the trades have not been executed, the results may with and through organisations with distinct service
have under or over compensated for the impact. No competencies in stock investment analysis, investor tools
representation is being made that any account will or is and solutions and capital market practices; all designed to
likely to achieve profits or losses similar to those shown in provide investors with a credible resource for intelligent
the report. decision making.

Proshare receives no compensation of any kind from any The firm takes extra steps to ensure that information
companies that may be mentioned in our reports or on our provided by it are accurate, fact checked and validated for
web site. Any opinions expressed are subject to change compliance with internationally acceptable standards and
without notice. Owners, employees and writers may hold practices. While this report is checked for accuracy, we are
positions in the securities that are discussed in our report not liable for any incorrect information included. We
or on our web site. Any reference to a trade mentioned in recommend that you make enquiries based on your own
the report or website, e-mail, publication or material is circumstances and, if necessary, seek professional advice
hypothetical and is not an actual trade. Hypothetical before entering into transactions. We are always happy to
performances and results do not represent actual cost of a receive your comments on how we can improve our
trade. services and make it more meaningful to the investing
public. Should you be interested in contacting us for
We encourage all investors to use the information in the further discussions on how such reports can be made
report as a resource only to further their own research on more meaningful to you or your organisation/investment
all featured companies, stocks, sectors, markets and club; kindly contactanalyst@proshareng.com
information presented in the report and on our site.

© 2010 www.proshareng.com May 2010 30

O nl ine



Analyst news & investigations


ISSN 1597 – 8842 Vol.1 No. 35


© 2010 www.proshareng.com May 2010 31