August 14, 2014 / 7:26 AM / 4 years ago

Kenya's Diamond Trust Bank profit jumps 17 pct on higher lending

NAIROBI, Aug 14 (Reuters) - Kenya’s Diamond Trust Bank increased first-half pretax profit by 17 percent year-on-year, helped by growth in net interest income and fees, it said on Thursday.

Banks in east Africa’s biggest economy have reported higher half-year earnings so far in 2014, buoyed by rising lending on the back of steady interest rates and economic growth.

Diamond Trust Bank, which focuses on services to small and medium-sized businesses, said its pretax profit rose to 4.1 billion shillings ($46.56 million) in the six months to the end of June.

The bank, which has subsidiaries in Kenya, Burundi, Tanzania and Uganda, said lending rose 27 percent to 120 billion shillings. Net interest income for the period rose 20 percent to 6.1 billion shillings.

Earnings per share for the group climbed to 11.93 shillings, from 11.14 shillings in the same period last year. The bank did not pay a dividend for the first half, having not paid a dividend for the same period last year.

The bank said on Wednesday it had raised 3.6 billion shillings in an oversubscribed rights issue to expand its branch network in the region and support lending.

Diamond Trust Bank is following a trend by its bigger rivals KCB, the country’s largest lender by assets, Equity Bank and Co-operative Bank of Kenya, to expand in the east African region, exploiting growing trade ties between countries and buoying their earnings.

KCB, Equity, Barclays and Co-op Kenya have all reported a surge in lending for the first half of the year, which has buoyed their earnings.

1 US dollar = 88.0500 Kenyan shilling Reporting by James Macharia; Editing by Pravin Char

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