Diamond Trust Bank Kenya Ltd., the Kenyan lender that’s raising 1.8 billion shillings ($21 million) in a rights offer, said first-half profit jumped 29 percent as earnings from loans surged.
Net income climbed to 1.7 billion shillings in the six months through June, from 1.34 billion shillings a year earlier, the Nairobi-based lender said in an e-mailed statement today. Net interest income, the amount banks earn from charges on loans, surged 47 percent to 4.34 billion shillings, it said.
“They achieved a healthy growth because their core business improved quite well,” John Kamunya, an analyst at Nairobi-based Sterling Investment Bank Ltd., said in a phone interview. “There was good growth in both net interest income and the loan book.”
Lenders in Kenya, East Africa’s biggest economy, have boosted loan income after the central bank raised interest rates to a record 18 percent in December to curb surging inflation and stabilize the shilling. Average lending rates at commercial banks are currently 20.12 percent, while deposit rates are 8.42 percent, according to the Central Bank of Kenya’s website.
Kenya Commercial Bank Ltd., the country’s biggest lender by assets, said July 26 first-half profit jumped 50 percent, while Equity Bank Ltd.’s net income grew 14 percent in the six-month period.
Shares of Diamond Trust closed 0.5 percent lower at 94.50 shillings in Nairobi. The stock has rise 9.7 percent this year, underperforming a 26 percent increase in the NSE All-Share index over the same period.