Nairobi-headquartered Diamond Trust Bank (DTB) has announced an 8.55% increase in net profit for the first half of 2024, reaching KES 4.34bn ($33.58mn), up from KES 4bn ($30.95mn) during the same period last year. This notable growth comes as the bank navigates a challenging regional banking environment in East Africa.

DTB's financial performance was bolstered by an 8.3% rise in net interest income, totalling KES14.2bn ($109.87mn). This is significant considering the broader regional trend, which has seen many lenders struggling with slower loan growth and, for many, the appreciating Kenyan shilling against the US dollar.

According to Business Daily Africa, Kenyan banks recorded currency losses of about KES50bn in the first half of the year when translating the financials of regional subsidiaries into shillings due to the unit's appreciation during the period.

The shilling has appreciated from 19 to 31% against the currencies of Uganda, Tanzania, Rwanda, Burundi and the Democratic Republic of Congo (DRC) since the beginning of the year, "reversing the depreciation of the local unit in 2023, when it was one of the world's worst performing currencies", the publication wrote on August 26.

DTB, meanwhile, also saw a 15.1% increase in non-interest income during the six-month period, reaching KES 6.4bn ($49.52mn). This boost has been pivotal in driving overall profit growth, the lender said.

Regional expansion has also played a crucial role in DTB’s success. Contributions from branches in Tanzania, Uganda, and Burundi now account for 35% of the group’s pre-tax profit, up from 23% last year, with Tanzania showing particularly strong performance, according to Business Daily Africa.

However, DTB has faced challenges, including a 12.1% rise in operating expenses to KES14.23bn ($110.10mn), DTB Group announced. This increase includes higher staff costs and greater provisions for loan losses. Gross non-performing loans also climbed to KES38.6bn ($283.17mn).

Despite these hurdles, DTB’s strategic emphasis on digital innovation and operational efficiency has allowed it to stand out amid slower growth observed at other regional banks. CEO Nasim Devji attributed the bank’s robust performance to its focus on expanding its customer base and advancing its digital capabilities, positioning DTB as a resilient player in East Africa’s competitive banking sector.

“We are strongly focusing on better delivery of our group business strategy, which is geared towards achieving socio-economic relevance and channelling DTB to be a customer-centric, top-tier, and digitally driven in East Africa,” Devji said. “The half-year progress is a clear reflection of hard work put in by our teams which enabled positive customer outcomes in markets outside Kenya.”

Historically strong in sectors like trade, manufacturing, real estate, and construction, DTB has broadened its focus by venturing into agriculture, education, technology, and the public sector. This expansion is designed to diversify its income streams and boost its presence in the market.

The bank’s ongoing commitment to digital transformation, expanding its customer base, and promoting sustainability is anticipated to enhance its financial performance in the future.