NMB gets stable rating amid the challenging environment

Dar es Salaam. The national Microfinance Bank (NMB) has received a credit rating indicating a stable outlook even as the operating environment was viewed as challenging. Tanzania is yet to be rated.

The globally-respected rating agency Moody’s Investors Services assigned the DSE-listed bank first-time rating of B1 on local currency deposit ratings; B2 on foreign currency deposit ratings; and a b1 baseline credit assessment (BCA) and adjusted BCA. This is the second Tanzanian commercial bank to be rated by an international rating agency after Moody’s assigned CRDB Bank with B1 stable outlook rating last August.

However, Moody’s views the NMB’s operating environment as challenging, as implied by the rating agency’s macro profile score of ‘Very Weak +’.

“The bank’s board of directors and management team are pleased with the rating and believe that the rating will enable the bank to negotiate more favourable terms with credit providers and instil further confidence with the bank’s counterparties,” said the bank in a statement issued yesterday.

“Attaining the rating is in line with the bank’s goal to position itself as a leading financial institution in the country. The ratings further confirm NMB’s solid capitalisation and good governance,” it added.

Both banks are listed on the Dar es Salaam Stock Exchange (DSE) and have the largest network of branches in the country. The B1 stable rating status is the highest rating to have been acquired by banks or financial institutions in sub-Saharan Africa.

NMB’s ratings reflect its solid capitalisation and profitability metrics, supported by its retail-focused domestic franchise; strong liquidity buffers and a retail-deposit funded profile that has withstood the gradual reduction of government deposits; relatively low non-performing loans that benefit from the solid performance of its salary-linked personal loans; and risks posed by high banking competition and lower potential growth in salary-linked loans.