Arusha. CRDB Bank Plc has raised the annual dividend by 60 per cent, thanks to an increase in the lender’s 2018 net profit.
The bank’s 24th Annual General Meeting (AGM), which was held here yesterday, approved a dividend of Sh8 per share, up from Sh5 per share that was paid last year.
The Sh8 per share translates into a total dividend of Sh20.9 billion, up from only Sh13.1 billion that was paid last year.
The bank’s financial statement, which was presented to shareholders by the board chairman, Mr Ally Laay, shows that the lender’s net profit rose to Sh64.1 billion in 2018 from Sh36.2 billion in 2017.
CRDB Bank Group comprises CRDB Bank, CRDB Microfinance Services Company Limited, CRDB Bank Burundi and CRDB Insurance Brokers Limited.
The Burundi Subsidiary registered a Sh2.6 billion net profit last year while the Insurance Broker made a net profit of Sh1.3 billion.
The CRDB Microfinance Services Company Limited was the only entity within the group that registered a loss, amounting to Sh8.7 billion in 2018.
According to the CRDB Bank Plc managing director, Mr Abdulmajid Nsekela, the results signify the impact of technology which the bank deployed as a way of improving operational efficiency and delivering convenience and flexibility for customers.
This, he said, includes making use of mobile banks to make the services available across various villages. With alternative channels, up to 85 per cent of the bank’s transactions are currently performed outside the branch.
He said though the BoT’s International Financial Reporting Standard 9 (IFRS 9) brought about significant changes to the accounting of impairment and measurement of expected credit loss, CRDB has been able to automate the system and move out strong.
According to him, the results also indicate the fact that the banking sector has been recovering and aligning itself to continuous monitoring from the Bank of Tanzania (BoT).
“The banking sector remained stable, with recovering profitability and healthy banking sector capital position as a result of continuous monitoring and support from the Bank of Tanzania,” he said. With close BoT monitoring, banks improved their credit management practices to reduce levels of Non-Performing Loans (NPLs) to 10. 4 per cent last year from 11.9 per cent in 2017.
Figures, produced by Mr Laay, show that the banking sector’s net profit rose to Sh273.2 billion in 2018 from Sh208.9 billion in 2017. The AGM was preceded by a seminar to equip shareholders with issues pertaining to ownership and stock market investment.