Tanzania’s commercial banks achieved a record-breaking net profit of over Sh1.16 trillion last year, marking the first time they surpassed the Sh1 trillion mark in the country’s banking history.
The exemplary performance was largely attributed to the government’s pro-business policies.
An analysis conducted by the Citizen of financial statements of leading commercial banks in Tanzania, which make up over 95% of the banking sector’s profitability, showed a significant increase from the previous year’s net profit of slightly over Sh760 billion.
The banks studied in the analysis include NMB Bank Plc, CRDB Bank Plc, Standard Chartered Bank, NBC Bank, Exim Bank, and Absa.
other lenders also included in the analysis include KCB Bank, Stanbic Bank, Peoples’ Bank of Zanzibar, Citibank, Azania Bank and DTB. The 12, along with Tanzania Commercial Bank, which registered a net profit of Sh3.152 billion in 2022, complete the list of 13 first-tier lenders in the country.
The massive rise in profitability – coupled with a reduction in levels of Non-Performing Loans (NPLs) and an increase in both customers’ deposits and loans and advances, among other performance parameters – comes as a massive improvement from what the sector experienced between 2016 and 2017 when it [the sector] grappled with a squeezed liquidity in the market.
Further analysis of the figures shows that the rate of revenue growth was higher in the non-funded income stream for a number of lenders than it was for the funded (interest income) stream.
Lenders say the growth in profits symbolises that the government’s pro-business agenda was yielding positive results.
“It is a reflection of good improvement in the business environment which is supported by good government policies, especially geared on the support for private sector growth,” the KCB managing director, Mr Cosmas Kimario.
He said KCB continued with its investment in digital channels which, he said, was key for the better serving of clients.
Consequently, his National Bank of Commerce (NBC) Bank counterpart, Mr Theobald Sabi, said the rise in the lender’s bottom line was a reflection of the continued growth of its customer base.
“The strong financial performance by NBC Bank for the year 2022 reflects the growth we are seeing across all our customer segments….Our loans and advances, deposits, and transactional volumes have grown…We have seen a healthy rebound within the SME portfolio,” Mr Theobald Sabi.
Read also; Tanzania’s Forex Reserves Drop to $4.96 Billion in September 2022.
