Investors in Diamond Trust Bank have faced a tough reality over the past decade, with new analysis showing that while their investment appeared to grow on paper, rising inflation erased those gains and left them worse off in real terms.
According to a report released on Thursday, individuals who bought DTB shares at the end of 2015 and held them through December 2025 recorded a nominal return of 52.61 percent. However, this growth did not translate into actual value, as inflation over the same period reached 73.77 percent, reducing the real return to a loss of 12.17 percent.
The findings highlight what the report describes as a “Performance Paradox: Nominal vs. Real Returns,” where positive figures on paper mask a decline in purchasing power.
“On paper, an investment in DTB at the end of 2015 grew by 52.61% cumulatively by the end of 2025,” the report stated.
This growth reflects a nominal compound annual rate of about 4.32 percent, pointing to steady but moderate performance over the ten-year period.
Despite this, the impact of inflation was severe. The report illustrates the effect by noting that the value of money declined sharply over time.
“This means Sh100,000 in 2025 only has the purchasing power that Sh57,547.33 had in 2016,” the report explains.
Once inflation is taken into account, investors experienced a decline in value, with the analysis showing a negative outcome.
“Investors actually saw their purchasing power decrease at a Real CAGR of ~-1.29%,” the analysis adds.
Dividend income played a key role in cushioning investors from deeper losses. While the share price recorded an overall drop, regular payouts helped support total returns.
Over the ten years, the share price moved from Sh169.10 in December 2015 to Sh156.75 in December 2025, marking a capital loss of Sh12.35 per share. During the same period, investors earned Sh40.50 per share in dividends.
“Dividends accounted for 143.87% of the total nominal return,” the report notes.
Without these payouts, the investment would have posted a clear loss even before adjusting for inflation, underlining the importance of dividend income in the stock’s performance.
The report also tracks periods of sharp decline and recovery. Between 2018 and 2022, the stock went through what is described as “The Dark Years (2018–2022),” when returns dropped steeply.
At its lowest point in 2022, cumulative nominal returns had fallen to minus 63.21 percent, reflecting a prolonged downturn during that period.
This was followed by a strong rebound. The stock recorded gains of 69.64 percent in 2024 and 140.22 percent in 2025, marking a notable recovery phase.
“The stock staged a massive comeback in 2024 and 2025,” the report says.
By the end of 2025, the share price had climbed back to Sh156.75, supported by a record dividend payout of Sh9.00.
Even with the recovery, the report notes that long-term investors are only just nearing their starting point in nominal terms, while still facing losses when inflation is considered.
“Those who held since 2015 are only just beginning to recover their original principal in nominal terms,” the analysis states.
The findings position DTB as a dividend-focused stock, where income payouts have been central in maintaining returns over time.
“The stock remains a heavy dividend play, as payouts were the only factor preventing a total nominal loss over the decade,” the report concludes.
The analysis highlights the wider challenge facing investors, showing how inflation can quietly reduce wealth over time, even when investments appear to perform well.