Dar es Salaam. The government is in the process of merging Tanzania Postal Bank (TPB) with Twiga Bancorp Limited, which has been under the control of the Bank of Tanzania (BoT) since 2016.
Treasury Registrar Oswald Mashindano confirmed to The Citizen that the ailing Twiga Bancorp will merge with TPB, which is among the best performing medium-sized banks in terms of profits in the country.
He was, however, noncommittal about when the merger would be completed, and referred The Citizen to his personal assistant, Mr Salmin Kaniki.
Mr Kaniki said BoT and the Treasury were working on the finer details of the planned merger.
“I think you are aware that Twiga Bancorp is still under the supervision of the Bank of Tanzania. What is currently being done is aimed at ensuring the bank’s smooth transition from receivership to merger with TPB. I can confirm that good progress has so far been made.”
In 2016, then BoT governor Benno Ndulu announced that Twiga Bancorp had been put under receivership, as it posed a risk to the interests of its customers and the financial sector in general.
BoT also suspended the board of directors and management, and appointed a statutory manager to take over the banks’ operations. This was after the government commissioned a study to look into the option of equity investment after the bank was reported to be facing a liquidity crisis.
BoT said in a statement last year that it was proving difficult to get an investor for the bank, which was then reeling under debts totalling Sh21 billion.
President John Magufuli is on record saying that concerted efforts to turn Twiga Bancorp around had failed.
Twiga Bancorp Limited was licensed by BoT in 1998. It is formally categorised as a non-bank financial institution, which means it can handle all transactions with the exception of taking deposits on current accounts.
From 1998 to 2016, Twiga Bancorp operated smoothly, but soon hit a rough patch, prompting BoT to take over its operations after dissolving the board of directors and management.
Twiga Bancorp is wholly owned by the government, which also has a controlling stake in TPB.
TPB Bank last year reported impressive earnings for 2016 when its net profit rose to Sh10.8 billion from Sh8.2 billion recorded in 2015 after income from interest went up by 37 per cent to Sh48.2 billion.