Diamond Bank Projects N35Billion Pre-Tax Profits By End Of 2013

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CEO’s of quoted companies are very good at keeping the momentum going especially when they release a substantial news such as an earnings report. The Managing Director of the Bank, Alex Otti in an earnings call announced that it is projecting a Pre-Tax Profit of about N30billion to N35billion.

“We are targeting (operating profit) of N50 and N55 billion by year-end. We believe we should be ending the year with anywhere between N30 to N35 billion in pre-tax profit,” 

Whilst that sounds a bit encouraging to some of us who own the shares (Diamond Bank is in our Portfolio) a projection of “thirty to thirty five billion” seem rather broad to me. This is because at N30billion for example the result will indicate an 11.1% rise over the prior year whilst at N35billion that will indicate a 30% rise!!!! More reason why statements like this are at times taken with a pinch of salt. However, one important information he did reveal was the difficulty the bank has been encountering in raising money from its planned Eurobond offering. According to the MD the reason for the delay in concluding the $550million Eurobond was due to turbulence in debt markets. it is however hoped that this will be achieved by year end.

Information from Thisday was used in writing this article