Diamond Trust Bank (K) Ltd Earnings Expectation FY2018
• We recommend a BUY on Diamond Trust Bank (DTB) based on our fair value estimate of KES 186.30, an upside of 34% from the current price of KES 139.00.
• The bank operates on a forward P/E ratio of 5.4x and forward P/B ratio of 0.7x, below the industry average of 7.3x and 1.3x respectively.
• Loan book growth projected at 4.1% to KES.204.13Bn resulting in 1.6% growth of interest income.
• We project 10.6% growth in PAT mainly driven by increased investment in government securities (12.0%) and growth of non-interest income (1.6%)
• We expect a slight increase in the bank’s NPL ratio to 7.5% compared to 7.2% in FY2017.
• The lender has maintained the dividend per share at KES.2.60 and we expect a similar payout in FY2018. Download Report