Diamond Bank Plc breaks the silence with its Q1'11 scorecard
Thursday, April 07, 2011
Key headlines show a 17% YoY decline in Gross Earnings (
N20.3 billion Vs. Q1’10 of N24.5 billion) while the After Tax Profit of N1.1 billion came in 29.6% weaker than 2010 corresponding period. In our opinion, the relatively weak performance of the bottom-line is not surprising given our earlier concern that Q1’11 earnings season will be a payback period for the banks as they begin to book the 1% general provisions (on Performing Loans) which was waived for FY’10 books.
We look forward to a detailed explanation on Diamond Bank’s near term strategies at its Conference Call, which comes up by 3:00pmtoday. While the counter is under review pending clarification of perceived grey issues from the Management at this Conference call, we believe DIAMOND is undervalued at the current price and thus recommend a BUY. Just as we reiterated in our earlier notes on Diamond, we are upbeat on the Bank’s H1’11 (and beyond) performance.
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