Diamond Bank, a Nigeria lender said its profits slumped 78 percent in 2015 as the plunge in oil prices weighed on Africa’s biggest producer.
According to the bank’s 2015 audited financial statement, posted on the website of the NSE, net income was N5.65 billion, lower than the N25.48 billion recorded in 2014.
The receding profit was as a result of a 109.21 percent increase in provision for loan losses to N55.17 billion in the period under review.
Nairametrics have observed that the rate at which banks earnings are dented by loss loan expenses or huge write offs is worrisome and must be curbed to avoid a financial crisis.
A drastic fall in oil price since last year has forced the government to curb spending and made it harder for companies to honour obligations. Economic growth slowed to 2.8 percent in 2015, the lowest since 1999. The International Monetary Fund forecasts a further slowdown in 2016.
Yesterday, First Bank, the largest lender in Africa’s largest economy recorded an 82 percent fall in net income, caused by huge write offs.
The introduction of the Treasury Single Accounts impacted negatively on Diamond Bank’s loan and deposit growth. Loans and advances to customers were down by 3.47 percent while deposit from customers fell by 18 percent.