DTB Bank released their results yesterday after market close. EPS increased by 4.3% y/y to KES 12.51 compared to analysts’ estimate of KES 12.98, hence 4% below expectations.

Earnings growth was boosted by higher interest income and lower-than anticipated staff costs.

Major Key Highlights;

– Net interest income increased by 5% y/y to KES 9.9bn, below expectations.

– Non-funded income increased by 8% y/y to KES 2.7bn, above expectations.

– Operating costs increased by 6% y/y to KES 5.6bn, below expectations.

– Loan loss provision declined by 2% y/y to KES 1.7bn, above expectations.

– PBT increased by 7% y/y to KES 5.4bn, below expectations.

Impact on Investment Thesis;

– Margins in 1H18 came lower at 5.8% against analyst forecast of 6.0%.

Following the 50 bps CBR cut, margins will likely remain squeezed and hence we expect to cut our margins.

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