| Barclays Bank approaches break-even after ten years | Send to a friend |
| Thursday, 02 September 2010 23:43 |
 By Samuel KamndayaShareholders for Barclays Bank Tanzania may finally smile as the bank is about to break-even.The bank’s balance sheet has started to grow, according to the bank’s financial statements for the second quarter of 2010. “We’re very happy with the pace…looking forward, we expect the growth to continue….we hope to break-even at the end of the year,” the bank’s managing director, Mr Kihara Maina told journalists in Dar es Salaam on Tuesday. Mr Maina expressed hope that the bank would be able to contribute towards government revenues from its profits, unlike the present time, whereby it only pay taxes through ‘Pay As You Earn’ (PAYE). The bank’s financial statements indicate that customers’ deposits went up by Sh29.891 billion. This translates into a 9.04 per cent puff up from Sh330.376 billion in March this year to Sh360.269 billion at the end of June. The value of non-performing loans (loans that are in default or close to being in default) decreased by 12 per cent. They (non-performing loans and advances) dropped from Sh61.063 billion to Sh54.493 billion during the same period. At the same time, loan portfolio increased by six per cent to Sh233 billion at the end of June 2010 from Sh220 billion in March. The bank also cut investments in government securities to Sh48 billion from Sh67 billion, in what Mr Maina described as an indication that the bank was really lending to the productive sector. “We started by supporting the productive sectors because their growth will help the governments to collect more taxes,” he said. Barclays Bank Tanzania operations were adversely affected by the advent of the global financial and economic crisis last year. However, according to Mr Maina, the bank has tweaked its operations by carefully selecting areas that performed poorly due to the crisis. “We have identified areas that were not performing well due to the crisis. We have carefully selected growth areas to choose and we are on the right track,” he noted. Mr Maina his bank still focuses on both corporate and small and medium enterprises (SME), understanding that the latter are the corporate businesses of tomorrow. However, a close look at the bank’s financial statements indicate that it registered a cumulative loss of Sh7 billion, which Mr Maina debased, saying the overall meaning of the financial statement was that the bank was on a smooth footing. “It’s not a matter of growing, but growing with prudence. If you look at the top line of our profit and loss account, you will realize that we are growing steadily by about six per cent. The issue here is that while operations are growing, you also make a net loss due to impairment costs,” he said. The bank’s net capital increased from Sh50.5 billion in March 2010 to Sh53.5 billion at the end of June 2010. Mr Maina commended the decision by the Bank of Tanzania (BoT) to increase initial capital required in setting up a commercial bank from Sh5 billion to Sh15 billion, saying it is a ‘step in the right direction’. According to him, more capital means that banks will have to invest more and become more aggressive in their operations to get positive yields on their investments. “It means that investors will always be worried about their money and therefore, they will get people who are ready to sweat in order to yield positive results,” he said. In Nigeria, he said, the decision to raise capital paid off. The country, which had over 95 banks, which never reached to the majority, now has fewer banks, which reach out to the people. Tanzania has almost 30 commercial banks. However, banking services reach out to just less than 15 per cent of the country’s estimated 40 million people. Barclays has invested massively in growth during the past three years, during which the number of its branches went up from four to 32, while the number of Automated Teller Machines (ATMs) went up from five to 54. The number of customers also went up from just 6000 to over 140,000. This necessitated the bank to increase the number of services as well as employees, whose number currently stands at 690. Add this page to your favorite Social Bookmarking websites           |
