DIAMOND BANK HIT BY TOXIC LOANS

Diamond Bank PLC has issued an alert on 2015 significant earnings and profit drop due to higher than expected provisions on some loans.
In a notice posted on the stock exchange website last Friday issued by Ifeatu O. Onwuasoanya, head, Investor  Relations, the bank declared:
"The continued deterioration in Nigeria's macroeconomic conditions has resulted in Diamond Bank PLC recognising higher than expected impairment charges on loans made to the energy and commercial sectors"
Hence, the notice added, preliminary indications are that earnings for 2015 will be lower than in 2014.
The bank assured that the full audited figures for 2015 will be released before the last day of this month.
It added that in spite of the 2015 developments, the quality of its loan portfolio remains high.
In addition, to mitigate the impact in the current year, Diamond Bank said significant changes have been made to its operations principally to drive down costs.
So coupled with investment also made to improve on customers relationship and boost revenue, it hopes to achieve far better result this year.
Of course, many companies have issued similar alerts in recent months especially since this years harvest of audited results seem to be running late.
Such alerts are most welcome and should help in managing the continued bearish outlook of the stock market.
Unlike in 2008 track to the still historic crash in the stock market, alerts should help spread out investors and brokers reaction to what looks like a potentially very bad year for most quoted companies.
If very poor results should flood the market at once without alerts that reduce expectations before hand, it could lead to a trigger of the recently activated circuit breaker especially when such results are from banks with high capitalisation.

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