I'm happy to own this through Jubilee my store of value.

@wangugi the other income that they have been getting from bonds may not be great but lets now think about the over 20 new branches they are opening... these are definitely bound to affect their bottom line next year...

I'm now seriously looking at this company VERY closely though I'm not sure if I should buy since I'm already big into my sweetheart Jubilee

I have had a closer look at the results and I have to agree with you. But I would only agree with you to the extent that when the effect of bond trading wears out, growth will decelerate but will not vanish. As g267 says, the additional branches will net in more customers bringing in additional transaction income.

Also note that the loan book grew by almost 30% and is expected to continue growing.

Hence the current relatively low PE ratio of 8.72 more than takes into account any reduction in PAT growth in 2011.

Branches take time to pay off, so expect a PAT decline next year. However the stock is good long term buy

@Wangugi, Your conclusion that the PAT will decline next year because of the drop off in bond trading income, coupled with increased investment in new branches is rather simplistic.

Practically all the other "local" banks have been increasing their branches over the last few years. None of them have reported reduced profits on account of this fact alone.

Q3 2010 also shows that DTB grew its Net Interest Income (NII) by 40% vis-a-vis Q3 2009. If it continued with this run rate, by Q3 2011, the NII will have grown by another 1.38 Billion. If we assume everything else is held constant i.e. No income from bond trading but other operating income and expenditure items remain as they are (thus eliminating the assumed bond income of 1,052,362,000), DTB would increase the PBT figure by about 326 million.

Now we know that it is highly unlikely that other income would drop to zero. So as long as other banks will be growing, you can be sure that DTB will be there along with them. It will just not be growing profits as fast as it has done this year.

Besides, you will have to go way back - at least more than 6 years to the last time that DTB reported reduced profits.

Over to you.