Investor call presentation H1 Results June 2012

Forward looking statements

This presentation contains or incorporates by reference forward-looking statements regarding the belief or current expectations of Diamond Bank, the Directors and other members of its senior management about the Groups businesses and the transactions described in this presentation. Generally, words such as could, will, expect, intend, anticipate, believe, plan, seek or similar expressions identify forward-looking statements. These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Company and/or its Group and are difficult to predict, that may cause actual results to differ materially from any future results or developments expressed or implied from the forward-looking statements. Such risks and uncertainties include, but are not limited to, regulatory developments, competitive conditions, technological developments and general economic conditions. The Bank assumes no responsibility to update any of the forward looking statements contained in this presentation. Any forward-looking statement contained in this presentation based on past or current trends and/or activities of Diamond Bank should not be taken as a representation that such trends or activities will continue in the future. No statement in this presentation is intended to be a profit forecast or to imply that the earnings of the Company for the current year or future years will necessarily match or exceed the historical or published earnings of the Company. Each forward-looking statement speaks only as of the date of the particular statement. Diamond Bank expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Diamond Banks expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Outline
Executive Summary and Strategy (by Dr. Alex Otti, GMD) H1 2012 YTD Financial Performance Business Segments Performance Concluding Remarks (by Dr. Alex Otti, GMD)
(by Abdulrahman Yinusa, CFO)

(by Abdulrahman Yinusa, CFO)

Overview
Nigerias economic fundamentals remain strong and attractive in the face of a slow down in global economic recovery.

The half-year 2012 performance of the Bank points to a healthy and sustainable profitability Quarter on Quarter on the back of an improved and more efficient balance sheet.
Our cost structure remained stable with improved revenues to produce lower Cost to Income Ratio and the risk indicators continue to show sustainable asset quality improvements. We remain focused on creating an enabling environment for customer experience, improving efficiency levels, as well as maintaining our strategic lead in Retail and SME banking. We are now in a position to issue an upward review of our profitability projections for Full Year 2012

Operating Environment
As the global economic recovery continues to advance, it faces fresh headwinds on the road to sustainable medium-term growth: The World Bank's twice-yearly Global Economic Prospects (June 2012) cautioned developing countries to prepare for further downside risks following persisting debt problems in the Euro zone. Consequently, World output growth is expected to decline further to 3.5% from 3.8% in 2012 (IMF) In the face of economic recession in advanced economies and prevailing security concerns, the domestic economy has remained resilient following data released by the National Bureau of statistics: Real GDP grew by 6.2% in Q1 2012 and is projected to grow by 6.5% by full year 2012. The major thrust of the Federal Government of Nigeria reforms and transformation agenda centers around Power, Transportation and Agriculture: The overall road map for Power sector reforms at the January 20, 2012 Power Sector Retreats point to government commitment to support the inflow of private sector investment in the Industry. The Petroleum Industry Bill (PIB) is finally ready and has been submitted to the National Assembly. Central to the CBN Monetary Policy thrust is price and exchange rate stability: Despite CBNs inflation targeting measures, inflation has remained in double digits (12.7% in May 2012) To this end, fiscal consolidation is critical and the challenge therefore lies with containing government expenditure and moderating the impact of inflation in food and imported goods.
5

2012 Building on a Solid Foundation

Corporate Banking
Network effect creates material differentiation,

Human Capital Management

Creating a culture of ownership, responsibility and accountability using our performance and consequence management initiatives Retaining our best people through the use of an aggressive reward and recognition model and competitive remunerations

strengthening the ability to win domestic wallet Creation of strong franchise value and annuity revenue stream Provide efficient cash management channels and e-banking platform to major corporate clients

Retail Banking
Continue to deliver significant growth on the liabilities side of the balance sheet Provide platform for financial inclusion by targeting the unbanked and under-banked Rollout of an empowerment product targeted at the female gender

Operational Effectiveness
Standardized processes and generating economies of scale. practices are

Risk management
Development of specialized lending skills in Project finance and Oil & Gas lending. Revision of credit policies and rating model to accommodate all customer needs and address new risks that have emerged.

Customer experience
Set up a Service Strategy and Governance team to drive the achievement of our vision Set up customer hotlines in all our branches to make for easy access by our customers.

H1 2012 Group Performance Analysis

P&L (NBn) June 2012 June 2011 % Growth Comments

Gross Earnings
Operating Profit Profit Before Tax

65 25 15

45 14 3

44% 79% 400%

From the foundation built in 2011, the return to profitability which started in Q1 continued into Q2.
The negotiations with some multilateral agencies for injection of Tier 2 capital have started yielding results following injection of $100 million Tier 2 capital in June and further injections expected in Q3 and Q4.

(NBn)

June 2012 June 2011 % Growth

Total Assets Loans to Customers Deposits

960 506

650 345

48% 47%

679

465

46%
7

Revised Forecast for 2012 Profitability - Upwards

Impact on P&L
Operating Profit

(NBn)
40.0 / 45.0

Deposits (NBn) and PBT (NBn) Operating Profit

40.0/45.0 27.6 27.8 25.5 20.0/25.0 15.4 -16.3

Provision for Losses (Circa)

~ (20.0)

4.8

Profit/(Loss) Before Tax

20.0 / 25.0

2010

2011 Operating Profit

H1 2012 PBT

2012 est

ROE
2010 2011 2012 est 2013 est

Comments
Sustained profitable growth in Q2 following return to profitability in Q1. Tier 2 capital of $100 million (or N15.75 billion) injected in Q2. Further injection of Tier 2 capital expected in Q3, in addition to capitalization of half-year profit. ROE of above 15% expected by year-end Cost of risk limited to not more than 5% in 2012
-11.2% 8

>15.0%

1.2%

Outline
Opening Statement and Strategy (by Dr. Alex Otti, GMD) H1 2012 YTD Financial Performance Business Segments Performance Concluding Remarks (by Dr. Alex Otti, GMD)
(by Abdulrahman Yinusa, CFO)

(by Abdulrahman Yinusa, CFO)

Financial Highlights
Assets Strong Balance Sheet Growth (Jan to Jun.12) Loans (net) Deposits

+20%

+29%

+13%

Stable net interest margin above 9% in the last 3 years; 9.2% in H1 2012 Revenue Mix Net operating income up 57.2% YoY, outpacing revenue growth Low cost of funds below 3.5% since 2010 and 2.8% in H1 2012 Continuous improvement in Cost to Income ratio 53.3% in H1 2012, from 63.9% in H1 2011 Growing Retail Banking business 51% of Naira deposits; driving high margins and sustainable earnings Upward swing to profitability following loss in 2011 Capital ratios 13% risk adjusted capital ratio in H1 2012 (15% for the Bank) Capital

Efficiency and Profitability

Tier 2 Capital inflow of $100m. Additional injection of about $400 million to be injected in H2 2012
Minimum CAR of about 17% expected by 31st December 2012

Asset Quality

Improving NPL 7.6% in H1 2012, from 9.4% in Dec. 2011 and 10.8% in H1 2011 Steady increase in coverage ratio 92.5% in H1 2012 from 64.7% in Dec. 2011, 50.4% in H1 2011
10

Group Statement of Comprehensive Income (H1 2012)

H1 2012 H1 2011 N' billion N' billion Gross Earnings Net Interest Income Impairment Charge Net interest income (after impairment charge) Other Income Operating Income Operating Expenses 64.9 42.0 (10.1) 31.9 12.6 44.5 (29.1) 15.4 10.0 (0.0) 10.0 44.7 24.5 (11.3) 13.2 15.1 28.3 (25.3) 3.0 1.7 (0.4) 1.3 YoY % 45.2 71.4 (10.6) 141.7 (16.6) 57.2 15.0 413.3 488.2 100.0 669.2 Q2 2012 N' billion 34.2 21.8 (5.5) 16.3 6.9 23.2 (15.6) 7.6 4.9 (0.2) 4.7 Q1 2012 N' billion 30.7 20.2 (4.6) 15.6 5.7 21.3 (13.5) 7.8 5.1 QoQ % 11.4 7.9 19.6 4.5 21.1 8.9 15.6 (2.6) (3.9)

Comments
Gross earnings up 45% or N20 billion to N65 billion (YoY) and up 11% (QoQ). This was primarily due to growth in risk assets volume Net interest income up 71% (YoY) to N42 billion Operating income up 57% or N16 billion (YoY) and up 9% QoQ Growth in revenue outpaced increase in oper. expenses thereby leading to 413% growth in profit before tax (YoY)

Profit Before Tax

Profit After Tax Other comprehensive income Total comprehensive income

0.2 (200.0) 5.3 (11.3)

11

Group Statement of Financial Position (H1 2012)

H1 2012 FY 2011 H1 2011 N' billion N' billion N' billion
Cash & Balances with Central Banks Loans & Advances to Banks Loans & Advances to Customers Investments Pledged Assets Fixed Assets & Intangibles

YtD %

Q2 2012 Q1 2012 QoQ N' billion N' billion %

Comments
Net risk assets volume up 47% to N506 billion (YoY) from N345 billion as at June 2011 Deposit base up N76 billion or 13% to N679 billion (between Dec. 2011 and June 2012) and up 46% YoY Total assets up 12% to N960 billion QoQ and up 20% year-to-date

70.1 99.6 505.7 120.0 63.8 40.0 11.0 49.9 960.1 9.4 679.3 101.7 55.8 15.8 10.0 88.1 960.1

55.8 90.6 392.0 190.0 13.5 39.5 10.8 10.5 802.7 21.0 603.0 38.0 54.9 (6.5) 92.3 802.7

31.3 88.8 345.0 67.3 34.7 35.4 5.8 41.7 650.0 3.2 465.3 52.5 27.1 1.7 100.2 650.0

25.6 9.9 29.0 (36.8) 372.6 1.3 1.9 375.2 19.6 (55.2) 12.7 167.6 1.6 253.8 (4.6)

70.1 99.6 505.7 120.0 63.8 40.0 11.0 49.9 960.1 9.4 679.3 106.8 55.8 15.8 4.9 88.1 960.1

61.8 92.7 433.5 37.9 38.8 9.3

13.4 7.4 16.7 68.3 3.1 18.3

164.6 (27.1)

Deferred Tax Asset

Other Assets Total Assets Deposits from Banks Deposits from Customers Other Liabilities Borrowings Tier 2 Capital Un-Audited Profit After Tax Equity Total Equity & Liabilities

16.7 198.8 855.3 12.3 7.1 641.1 58.6 53.2 5.1 90.2 855.3 (3.9) (2.3) 12.3 32.4 6.0 82.3 4.9

19.6

12

Bank Statement of Comprehensive Income (H1 2012)

H1 2012 H1 2011 N' billion N' billion YoY % Q2 2012 Q1 2012 N' billion N' billion QoQ %

Comments
Earnings up 45% to N61 billion (YoY) and up 13% QoQ Net interest income up 73% or N17 billion (YoY) to N40 billion

Gross Earnings Interest Income

60.6 49.1 (8.8) 40.3 (9.9) 30.4 11.4 41.8 (26.6) 15.2 9.9 0.3 10.2

41.9 27.6 (4.3) 23.3 (11.2) 12.1 14.0 26.1 (23.5) 2.6 1.7

44.6 77.9 104.7 73.0 (11.6) 151.2 (18.6) 60.2 13.2 484.6 482.4

32.1 25.7 (4.7) 21.0 (5.3) 15.7 6.3 22.0 (14.5) 7.5 4.9 (0.2) 4.7

28.5 23.4 (4.1) 19.3 (4.6) 14.7 5.1 19.8 (12.1) 7.7 5.0

12.6 9.8 14.6 8.8 15.2 6.8 23.5 11.1 19.8 (2.6) (2.0)

Interest Expense
Net Interest Income Impairment Charge Net interest income after impairment charge Other Income Operating Income Operating Expenses Profit / (Loss) Before Tax Profit / (Loss) After Tax Other Comprehensive Income (Net of Tax) Total Comprehensive Income for the period

(0.2) (250.0) 1.5 580.0

0.5 (140.0) 5.5 (14.5)

13

Bank Statement of Financial Position (H1 2012)

H1 2012 FY 2011 H1 2011 N' billion N' billion N' billion Cash & Balances with Central Banks Loans & Advances to Banks Loans & Advances to Customers Investments YtD % Q2 2012 Q1 2012 QoQ N' billion N' billion %

Comments
Net risk assets volume growth continued to be very impressive. Loan book up N112 billion or 41% to N460 billion yearto-date, and up 18% QoQ (from N391 billion as at Q1 2012) Deposit base up 44% to N613 billion (YoY) and up 12% year-to-date Total assets up N274 billion or 46% YoY to N865 billion and up 20% year-todate (Dec 2011: N720 billion)

54.4 85.9 459.7 109.1 63.8 36.8 10.9 44.0 864.6 4.8 612.7 78.8 55.8 15.8 9.9 86.8 864.6

54.4 72.1 347.3 179.2 13.5 35.9 10.8 6.3 719.5 3.9 545.2 45.5 54.9 (19.1) 89.1 719.5

24.0 90.9 326.8 62.2 34.7 33.8 5.8 12.7 590.9 3.8 426.2 22.5 27.1 1.7 109.6 590.9

0.0 19.1 32.4 (39.1) 372.6 2.5 0.9 598.4 20.2 23.1 12.4 73.2 1.6 151.8 (2.6) 20.2

54.4 85.9 459.7 109.1 63.8 36.8 10.9 44.0 864.6 4.8 612.7 83.8 55.8 15.8 4.9 86.8 864.6

52.7 83.0 390.9 37.9 35.2 9.3

3.2 3.5 17.6 68.3 4.5 17.2

152.5 (28.5)

Pledged Assets
Fixed Assets & Intangibles Deferred Tax Asset Other Assets Total Assets Deposits from Banks Deposits from Customers Other Liabilities Borrowings Tier 2 Capital Un-Audited Profit After Tax Equity Total Equity & Liabilities

12.1 263.6 773.6 11.8 5.8 (17.2) 584.1 53.2 5.0 88.2 773.6 4.9 4.9 (2.0) (1.6) 11.8 37.3 124.7

14

Key Performance Metrics H1 2012 Group

Half-Year 2012 YTD March 2012 Full Year 2011 Half-Year 2012

Bank
YTD March 2012 Full Year 2011

NIM NPL Cost of funds Coverage Loan-to-Deposit Ratio Capital Adequacy * Liquidity Cost to Income Ratio Comments

9.2% 7.6% 2.8% 92.5% 80.0% 13.1% 39.6% 53.3%

9.5% 8.0% 2.7% 87.4% 72.7% 12.4% 46.1% 51.9%

8.8% 9.4% 2.2% 64.7% 69.2% 13.9% 46.3% 66.7%

9.7% 7.7% 2.8% 95.5% 80.9% 15.2% 39.6% 51.4%

10.0% 8.2% 2.6% 91.4% 72.4% 13.3% 45.9% 49.5%

9.1% 9.9% 2.1% 69.9% 68.4% 14.9% 46.3% 64.5%

The Group Net Interest Margin (NIM) declined to 9.2% in June from 9.5% in Q1 2012 due to increasing cost of funds as well as decrease in risk asset margin following increase in foreign currency loans with lower yields compared to the yield on naira loans. Capital adequacy ratio (CAR) of 15.2% (Bank) and 13.1% (Group) following Tier 2 capital injection of $100 million (N15.75 billion) and inclusion of half-year post-tax profit of N10.0 billion. Already concluding on additional Tier 2 capital to be injected in Q3 & Q4. * Capital Adequacy Ratio computation includes the half-year post-tax profit of N10 billion
15

Risk Management Metrics H1 2012

Group
H1 2012 N billion Gross risk assets NPL Provisions NPL ratio NPL coverage Comments
Improving Coverage Ratio to 92.5% in June 2012 from 87.4% in Q1 2012. NPL ratio of 7.6% in June from 8.0% in Q1 2012 and 9.4% at the start of 2012. Target NPL ratio for December 2012 still remains < 5.0%.

Bank
Q4 2011 N billion 417.5 39.4 25.5 9.4% 64.7% H1 2012 N billion 496.0 38.0 36.3 7.7% 95.5% Q1 2012 N billion 422.8 34.9 31.9 8.2% 91.4% Q4 2011 N billion 373.0 36.9 25.8 9.9% 69.9%

Q1 2012 N billion 466.3 37.4 32.7 8.0% 87.4%

543.9 41.4 38.3 7.6% 92.5%

16

Group Key Underlying Profit Drivers

Net Interest Income (YoY: +71%, QoQ: +8%)
42.0

Non-interest Income (YoY: -17%, QoQ: +21%)

NBillion
15.1 12.6

NBillion

24.5

20.2

21.8
5.7

6.9

H1 2011

H1 2012

Q1 2012

Q2 2012

H1 2011

H1 2012

Q1 2012

Q2 2012

Operating Expenses (YoY: +15%, QoQ: +16%)

29.1 25.3 13.5 15.6

Impairment Charge (YoY: -11%, QoQ: +20%)

NBillion
11.3 10.1 4.6 5.5

NBillion

H1 2011

H1 2012

Q1 2012

Q2 2012

H1 2011

H1 2012

Q1 2012

Q2 2012

Comments
Net interest income up 71% YoY driven by increased loan book (gross) by N126 billion to N544 billion and up 8% QoQ

Non-interest income down 17% YoY due to waivers on fee generating transactions, offset by increase in net interest income
Operating expenses up 15% YoY following recent increase in staff salaries and benefits in Q2. Reduction in credit impairment charges due to effectiveness of risk management processes and improved loan book quality.
17

Group Balance Sheet Structure

Total Assets (NBn) Jun 2012 (Dec 2011)
960 803

Balance Sheet Trend (NBn)

803 855 603 392 641 960

170 146
506 392

679 434
506

120 190

64 14
Pledged Assets

40

39 61

21 Dec. 2011 Mar. 2012 Deposits Jun. 2012 Loans & Advances

Total Assets

Liquid Assets

Risk Assets

Investments

Fixed Assets

Other Assets

Total assets & Contingents

Total Liabilities (NBn) Jun 2012 (Dec 2011)

960 803 679 603

Comments
Balance sheet up N157 billion or 20% to N960 billion year-todate (Dec 2011 N803 billion). The growth was driven by increase in deposits by 12% or N76 billion year-to-date; Tier 2 Capital of N16 billion and increase in money market activities.

121

31 56 55

Net loan book up by N114 billion or 29% to N506 billion (Dec. 2011: N392 billion) and up 17% QoQ.

16

88

92

Total Liabilities

Deposits

Other Liabilities

Borrowings Tier 2 Capital

Equity

Customer deposit inflows have been strong. Deposits stood at N679 billion, up 46% year-on-year, 6% quarter-on-quarter and 13% year-to-date (YTD) 18

Group Lending
Gross Loan Breakdown Dec 2011 (Mar 2012) Dec-11
N417Bn (N466Bn)

Sep-11 Gross Loan Breakdown June 2012

N544Bn

10% 12%

7% 6% 5% 5% General Comm 25% (21%) Oil & Gas 19% (18%) Manufacturing 12% (16%)
Real Est & Const 10% (11%)

11%

11% 10% Oil & Gas 26% General Comm 25%

25%

19%

5%

Power & Energy 7% (8%) Consumer Credit 6% (7%) ICT 5% (6%) 3% 1% 1% 1% 0% Government 5% (0%) Others 5% (5%) Mortgage 3% (1%) Agriculture 1% (1%) Transportation 1% (2%) 26%

5% 5% 3% 1% 1% 1% 1%

Manufacturing 11% Real Est & Const 11% General 10% Power & Energy 5% Government 5% ICT 3% Agriculture 1% Transportation 1%

25%

Finance and Ins. 1% (1%)

Capital Market 0% (2%)

19

Group Loan and Deposits Growth

Gross Loan Analysis Chart Title by Maturity (NBn) Jun 2012 (Dec 2011)
Over 12 months 1-3 months 0 - 30 days 3-6 months 6-12 months 43.1 32.1 42.8 75.3 239.8 151.3 140.4 77.5 77.8 81.3 Jun. 2012 Dec. 2011 350 417 39 0 Dec. 2011 Gross Loans Mar. 2012 Non Performing Loans Jun. 2012 Deposits 466

Loan Growth, Non Performing Loans (NBn) & Deposits Growth

700 603 641 680

544

37

41

Comments
Gross loan book grew by N127 billion or 30% to N544 billion yearto-date (Dec 2011: N417 billion) despite limited industry growth and increased competition for good quality credits.

Loan to Deposit Ratio

69.2%

72.7%

80.0%

About 56% of loan portfolio falls within 12 months while 44% are medium to long term loans
Underlying credit quality continues to improve The loan to deposit ratio increased to 80% due to growth in risk assets

Dec. 2011

Mar. 2012

Jun. 2012 20

Group NPL Analysis

NPL by Sector (Jun 2012) (Dec. 2009)
General Commerce 41%

NPL by Category
N40.6Bn 40% N39.4Bn 12% 39% Construction 16% N37.4Bn 81% N41.4Bn 18% 74%

Oil & Gas 22%

N41.4Bn

Communication 7% General 6% Manufacturing 5% Others 3%

33% 49% 27% Jun. 2011 Dec. 2011 Substandard 18% Mar. 2012 Doubtful 8% Jun. 2012 Lost

NPL by Sector (Dec 2011)

General Commerce 35% Oil & Gas 30% Real Estate & Constr. 11%

Comments
General Commerce and Oil & Gas sectors account for

over 63% of total NPLs

N39.4Bn

Communication 9% Consumer Credit 6% Manufacturing 3% Power 2%

Others 4%
21

Group Asset Quality

NPL Ratio
10.8% 11.5% 9.4% 8.0% 7.6% 50.4% 57.6% 64.7%

Coverage Ratio
87.4% 92.5%

Jun. 2011

Sep. 2011

Dec. 2011

Mar. 2012

Jun. 2012

Jun. 2011

Sep. 2011

Dec. 2011

Mar. 2012

Jun. 2012

Comments
NPL Ratio to be brought to <5% by end of 2012 Coverage ratio expected to be 100% by end of 2012 Cost of risk to remain within 5% by year-end

Cost of Risk
11.6% 7.1% 6.1% 4.7% 4.2%

Jun. 2011

Sep. 2011

Dec. 2011

Mar. 2012

Jun. 2012 22

Bank Capital and Liquidity

Capital Adequacy (CAR)*
17.9% 17.9% 14.9% 13.3% 15.2% 15% 31% 38% 21% 41% Jun. 2011 Sep. 2011 Dec. 2011 Mar. 2012 Jun. 2012 52% Cash & Equivalent Placement Treasury Bills

Liquid Assets Jun 2012 (Dec 2011)

Jun 2012 (Outer Circle) Dec 2011 (Inner Circle)

10%

10%

10%

10%

10%

17%

Actual CAR

Stat. Minimum Requirement

Comments
Liquidity
44.2% 38.0% 30% 30% 30% 30% 46.3% 45.9% 39.6% Our pursuit for more profitable investment outlets resulting in calculated risk assets growth necessitated the decrease in liquidity ratio to about 40% but well above the regulatory minimum of 30% Balance sheet funded largely from deposits. Deposit liabilities accounted for more than 70% of total liabilities CAR expected to increase to over 17% following additional injection of Tier-2 capital by end of Q3 & Q4. Jun. 2011 Sep. 2011 Liquidity Dec. 2011 Mar. 2012 Jun. 2012

30%

Stable source of funding to exploit market opportunities.

23

Stat. Minimum Requirement

* Capital Adequacy Ratio computation includes H1 PAT of N10 billion

Group Net Interest Margin

Net Interest Margin (NIM)
9.1% 8.8% 9.5% 9.2% 10.8% 10.8%

Yield on Earnings Assets

12.0% 11.7%

Jun. 2011

Dec. 2011

Mar. 2012

Jun. 2012

Jun. 2011

Dec. 2011

Mar. 2012

Jun. 2012

Cost of Funds
2.7% 2.0% 2.2% 2.8%

Comments
Strong net interest margin of 9.2% Low cost of funds of 2.8% Cost of risk to remain below 5% at year-end

Jun. 2011

Dec. 2011

Mar. 2012

Jun. 2012 24

Outline
Opening Statement and Strategy (by Dr. Alex Otti, GMD) H1 2012 YTD Financial Performance Business Segments Performance
(by Abdulrahman Yinusa, CFO)

(by Abdulrahman Yinusa, CFO)

Concluding Remarks (by Dr. Alex Otti, GMD)

25

Current Business Segments

Retail Banking
Deriving value from existing focus on retail customers, with monthly turnovers of N40 million and below Comprises all segments of consumer + MSME Delivers circa 40% of All-Bank income Over 1.5 million customer accounts with new product sales of around 2,000 per day Funds 50% of Naira liability balance sheet and around 15% of risk assets Regular monthly fee income in excess of N 600 million Over 220 branches; over 260 ATMs; Mobile and Internet Banking; 24/7 Contact Centre + 1200 Direct Sales Agents.

Corporate Banking
Deriving value from focusing on corporate customers with monthly turnovers over N1 billion

Business Banking
Deriving value from focusing on enlarged middle-market customer with turnovers from N40 million N1 billion Meeting customer expectations through various value -adding product offerings & service delivery channels Delivering convenience as differentiating strategy Critical target markets: Tertiary Institutions State governments Companies with large monthly business turnover(Not Multinationals)

Re-structured in terms of geographical focus and target market segments Developing and managing business relationships with multinationals and local large corporations Clear understanding of clients business operations and requirements Organised in 5 groups: Energy Institutional banking Infrastructure & transport Public Sector(Collection) Structured finance & Advisory

Public sector Banking

Deriving value from business focus on specific needs of: Federal government ministries & Parastatals State governments and their Institutions & Agencies Embassies and Foreign missions DFIs

Relationship manage through dedicated specialists in public sector finance

26

Group Business Segments

Deposits (NBn)
Jun 2012 (Outer Circle) Dec 2011 (Inner Circle)

Retail Banking
Retail banking provides consumer loans, mortgage loans, credit card and other facilities, handling deposits for individuals and legal entities, encompassing the mass affluent segment, retail mass markets and MSME businesses 51.0

Risk Assets (NBn)

Jun 2012 (Outer Circle) Dec 2011 (Inner Circle)

Business Banking
67.4
Grow diversified and profitable assets, increase deposits, fee based business & international trade finance whilst delivering client solutions and providing beneficial business relationships with small, medium and fairly large-scale business enterprises, as well as high net-worth and medium income individuals

190.2

48.3
295.8 57.4

135.4
41.4

46.0

266.4

N397.4bn
65.0 65.1

Corporate Banking
229.6 265.1 The Corporate Banking is positioned to provide leading financial services capabilities to large local and multinational corporate clients in the various strategic sectors of the economy. We commit our expertise in financing strategies to power our clients ambition as we work closely with them.

155.6

204.4

Subsidiaries
DBB Group and DPFC Limited

27

Retail Banking The Most Innovative Retail Bank in Nigeria

Jun 2012 (Dec 2011) Personal Loan 18% (24%)
24%

Jun 2012 (Dec 2011) Time deposits 13% (10%)

18% (24%)

13% (13%) 53% (51%)

Mortgage 13% (13%) Savings & Current A/C 87% (90%)

Credit Card 12% (7%) MSME 53% (51%) Autoloan & Lease 4% (4%)

Total Retail Loans N65.1bn (Dec 2011: N65bn)

Total Retail Deposits N265bn (Dec 2011: N230bn)

Comments
Well diversified loan portfolio with high yields Strong credit discipline evident with Non Performing Loans at 4% of average retail loan portfolio Maximise relationship value through differentiated product suite Plans for branch expansion are well established and will roll out over the next 18/24 months Winner of best Credit Card in Nigeria award (2nd year running) Plan in place for pilot venture into un(der) banked market in 3rd quarter 2012
28

Retail Banking Where are we now and where did we come from?
Actual June 08
Liability Balances N60 billion

Actual June 10
N150 billion

Actual June 12
N265 billion

Asset Balances

N6 billion

N13 billion

N65 billion

Number of Accounts

Approx 1 million

Approx 1.45 million

Approx 1.75 million

Monthly Recurring Fee Income

Less than N100 million

Circa N300 million In excess of N700 million

The Retail Banking Story June 2008/2012

29

Retail Banking Quarterly Trend in Deposits

Retail Deposits (NBn)
35%
15% 230 248 265

Strategy for deposit growth

Customer Recruitment - Focus on adding value to customers and lower barriers to banking. Increase number of active customers and diversify income streams. Grow (low-cost) Liabilities Through increased customer base and innovative propositions. The rate of interest becomes only one feature and not the focus (Cost of funds is currently < 3%).

196

210

Jun. 2011

Sep. 2011

Dec. 2011

Mar. 2012

Jun. 2012

Retail Deposits to Banks Total Deposits Naira (%) Deposits (NBn)

52% 51% 49% 48% 51%

Jun. 2011

Sep. 2011

Dec. 2011

Mar. 2012

Jun. 2012 30

Retail Banking Continues to show Healthy Growth

Retail Monthly Fee Revenue (NBn)
63.2 42.2 65.0 63.7 65.1 1.8 1.5 1.9 1.6

Retail Quarterly Fee Revenue (NBn)

47% 38% 2.2

Jun. 2011

Sep. 2011

Dec. 2011

Mar. 2012

Jun. 2012

Jun. 2011

Sep. 2011

Dec. 2011

Mar. 2012

Jun. 2012

Retail Risk Assets Classification (NBn)

4.4 17.3 5.5 2.9 12.1 Jun. 2011 Personal Loan 5.3 30.5 4.8 33.3 6.0 8.1

Comments
Regular monthly Fee Income for Q2 2012 of over N700 million Average product sales approaching 50,000 per month Provisioning of circa 4% taken on retail lending portfolio in H1 2012 High margin, high fee business driving growth in profitability
31

33.0

34.7

9.3 3.9 14.2 Sep. 2011

8.7 2.7 15.5 Dec. 2011

8.4 2.7 13.6 Mar. 2012 MSME

8.2 2.6 11.5 Jun. 2012 Credit Card

Autoloan and Lease

Mortgages

Outline
Opening Statement and Strategy (by Dr. Alex Otti, GMD) H1 2012 YTD Financial Performance Business Segments Performance Concluding Remarks (by Dr. Alex Otti, GMD)
(by Abdulrahman Yinusa, CFO)

(by Abdulrahman Yinusa, CFO)

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Diamond Bank Outlook for H2 2012

Following the cleanup in 2011 and the return to profitability in Q1 2012, we have continued to show improved performance as evidenced by Q2 2012 results. Despite the infrastructural and security challenges inhibiting business growth in Nigeria, we are optimistic that there exist opportunities in the real sector to strengthen our

business volumes, earnings and profitability through a combination of a highly motivated

workforce and a customer centric products innovation in our various business segments. The Banks medium-term strategy remains focused on organic expansion whilst not discounting value adding opportunities for inorganic growth that may arise. We have revised our profitability projection for 2012 upwards with target ROE from minimum of 10% to above 15% in 2012 and increasing in 2013 and beyond.

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Q&A
34