Azania Bank pre-tax profit ‘doubles’ in second quarter

Dar es Salaam. Azania Bank Ltd (ABL)’s pre-tax profit climbed to Sh3.1 billion during the second quarter of this year, which ended in June, as compared to Sh1.7 billion recorded during the same period last year.

ABL’s quarterly financial statement for the second quarter of 2019, which was published yesterday, shows that the profit is attributable to an increase of net interest income to Sh17.8 billion from Sh9.2 billion.

However, non-interest expenses increased to Sh15.9 billion in the second quarter from Sh8.8 billion in the corresponding period of 2018.

Despite doubling its profit, the bank is facing the challenge of addressing non-performing loans (NPLs). The NPLs soared to Sh298.5 billion from Sh24.8 billion in the same period this year.

The bank performance in the first quarter contravened regulations laid down by the Bank of Tanzania (BoT), which requires banks to maintain a below five per cent NPL ratio.

Speaking to The Citizen, the bank’s managing director, Charles Itembe, said the increase of NPLs was down to the acquisition of defunct Bank M assets, which was under statutory management for nine months.

He said during the period under the statutory management Bank M was not operational, hence transactions (payments and collections) were literally not active for more than 270 days, which led to an increase of NPL, something which was expected.

“We are looking forward to making an improvement after reaching some agreements with stakeholders. The effective use of facilities and accounts will certainly improve the NPLs ratio in the near future,” he said.