Diamond Trust Bank half-year profit up 10pc

Managing Director and Chief Executive Officer (MD and CEO) of Diamond Trust Bank Kenya Murali Natarajan.[David Gichuru/Standard]

Diamond Trust Bank (DTB) Kenya has reported a 9.9 per cent jump in profit after tax for the six months to June this year, which it attributed to growth in net interest income.

The bank posted a net profit of Sh4.77 billion for the half compared to Sh4.34 billion over a similar half last year.

The bank's surge in profits was supported by an increase in net interest income, which grew 11.77 per cent to Sh15.86 billion over the half to June 30, up from Sh14.19 billion in 2024.

Interest income from lending to customers grew to Sh16.13 billion from Sh15.98 billion in the same period last year, defying the lower interest rate regime following the downward revision on loan rates by the Central Bank.

CBK has, in recent months, lowered the Central Bank Rate from a high of 13 per cent in early 2024 to 9.5 per cent this month, with commercial banks following suit and lowering their lending rates.

Following the lower loan rates, the bank reported an increase in overall lending, with the lender's loan portfolio growing 7.7 per cent to Sh288.46 billion during the half from Sh267.86 billion as at June 2024.

Its earnings from Treasury Bills and Bonds, however, dropped to Sh12.02 billion from Sh12.72 billion over the first half of 2024 as the bank took a hit from declining interest rates on government securities.

Average yield on 91-day Treasury Bills has, for instance, dropped to about 10 per cent early this year and about eight per cent in July this year from a high of 16 per cent in January last year.

DTB's customer deposits increased to Sh483.17 billion over the first half to June this year from Sh431.9 billion last year.

The bank's asset base grew by 4.5 per cent to Sh611.5 billion while operating expenses grew by 8.5 per cent to Sh11.5 billion.